AAIPHARMA INC: Has Until Jan. 5 to File Plan of Reorganization--------------------------------------------------------------The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for theDistrict of Delaware extended until Jan. 5, 2006, aaiPharma Inc.and its debtor-affiliates' exclusive period to file a chapter 11plan of reorganization. The Debtors' exclusive period to solicitplan acceptances is also extended to March 6, 2006.

As reported in the Troubled Company Reporter on Sept. 16, 2005,the Debtors said that the extension will give them more time todevelop a fair and feasible plan that would allow them to emergefrom bankruptcy as a viable business.

As reported in the Troubled Company Reporter on Sept. 15, 2005,Chanin Capital will receive a $50,000 initial payment from theDebtors upon the Bankruptcy Court's approval of their retention.The Debtors will pay the Firm an additional $200,000 after theValuation Report is completed and delivered. Chanin Capital willalso receive a $50,000 fee for any deposition or live testimony itwill provide in connection with the Valuation Report.

Accellent Corp.'s existing debt, including its senior securedcredit facility and its existing 10% senior subordinated notes due2012, is expected to be refinanced in connection with the closingof the merger. Consequently, ratings tied to those borrowingswill likely be withdrawn.

Still, the corporate credit rating on the medical device contractmanufacturer may be affected by shifts in business and financialstrategies relating to the company's change in ownership.Standard & Poor's expects to review Accellent's strategic plans,the details of the acquisition proposal, and the likelihood of itsexecution in conjunction with our rating review on the company.

ALOHA AIRGROUP: Exclusive Plan Period Extended to Oct. 26---------------------------------------------------------The U.S. Bankruptcy Court for the District of Hawaii extendeduntil Oct. 26, 2005, Aloha Airgroup and Aloha Airlines, Inc.'speriod within which they have the exclusive right to file a planof reorganization.

The Court also gave the Debtors until Dec. 31, 2005, to solicitacceptances of that plan.

Since their chapter 11 filing, the Debtors have focused anenormous amount of their time and resources on their aircraftlease issues under section 1110, and obtaining bridge financingand a DIP loan to assure liquidity during the administration oftheir chapter 11 cases.

An extension of exclusivity "will facilitate moving the caseforward towards a fair and equitable solution," the Debtors toldthe Bankruptcy Court.

Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. --http://www.alohaairlines.com/-- provides air carrier service connecting the five major airports in the State of Hawaii. AlohaAirgroup and its subsidiary Aloha Airlines, Inc., filed forchapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., andSimon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevanskyrepresent the Debtors in their restructuring efforts. When theDebtor filed for protection from its creditors it listed more than$50 million in estimated assets and debts.

ALOHA AIRLINES: Has Until October 28 to Decide on Leases--------------------------------------------------------The U.S. Bankruptcy Court for the District of Hawaii gave AlohaAirgroup, Inc., and Aloha Airlines, Inc., until Oct. 28 to decidewhat to do with their unexpired non-residential real propertyleases pursuant to Section 365(d)(4) of the Bankruptcy Code. TheDebtors have the option to assume, assume and assign or rejectthose unexpired leases.

The Debtors told the Court that the leased premises are beingutilized in their operations. They don't want to make a prematurerejection or assumption of a lease which may prove to be importantor cumbersome to the estates.

The Debtors assured the Court that they are current in all theirpostpetition rent obligations.

Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. --http://www.alohaairlines.com/-- provides air carrier service connecting the five major airports in the State of Hawaii. AlohaAirgroup and its subsidiary Aloha Airlines, Inc., filed forchapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., andSimon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevanskyrepresent the Debtors in their restructuring efforts. When theDebtor filed for protection from its creditors it listed more than$50 million in estimated assets and debts.

AMERICAN HEALTHCARE: Wants More Time to File Chapter 11 Plan------------------------------------------------------------American Healthcare Services, Inc., and American PhysicianServices, Inc., ask the U.S. Bankruptcy Court for the NorthernDistrict of Georgia, Atlanta Division, for an extension oftheir time to file and solicit acceptances of a chapter 11 plan.The Debtors want until Dec. 7, 2005, to file a plan and untilFeb. 6, 2006, to solicit acceptances of that plan.

The Debtors submit they need the extension to negotiate withparties-in-interest to come up with a consensual plan.

Headquartered in Roswell, Georgia, American Healthcare Services,Inc. -- http://www.american-healthcare-services.com/-- provides practice management to physicians and other health care providerswho work in the fields of ear, nose, throat and head and neckmedicine, including financial and administrative managementservices. The Company and its debtor-affiliate filed for chapter11 protection on March 11, 2005 (Bankr. N.D. Ga. Case No. 05-64660). When the Debtors filed for protection from theircreditors, they listed estimated assets of $1 million to $10million and estimated debts of $10 million to $100 million.

AMERIGAS PARTNERS: Exchanging $415M Notes for Registered Bonds--------------------------------------------------------------AmeriGas Partners, L.P., commences an offer to exchange up to$415 million aggregate principal amount of its 7.25% Series BSenior Notes due 2015 that are registered under the Securities Actof 1933 for a like principal amount of its outstanding 7.25%Series A Senior Notes due 2015 which it issued previously withoutregistration under the Securities Act.

The form and terms of the exchange notes and the original notesare identical in all material respects, except that the exchangenotes will not be subject to transfer restrictions or entitled toregistration rights, and the additional interest provisionsapplicable to the original notes will not apply to the exchangenotes.

AmeriGas Partners, L.P., and AmeriGas Finance Corp., a whollyowned subsidiary of AmeriGas Partners, L.P., issued the originalnotes and will issue the exchange notes.

Wachovia Bank, National Association serves as the exchange agent.

Terms of the Notes

The notes mature on May 20, 2015.

Interest on the exchange notes will accrue at the rate of 7.25%per annum, payable semiannually in cash in arrears on each May 20and Nov. 20, commencing on November 20, 2005.

On or after May 20, 2010, the Company may redeem the exchangenotes. Prior to May 20, 2008, the Company may redeem up to 35% ofthe original principal amount of the notes with the proceeds of aregistered public offering of its common equity.

The exchange notes will be senior unsecured joint and severalobligations of AmeriGas Partners, L.P. and AmeriGas Finance Corp.

The exchange notes will rank pari passu in right of payment withall of the other existing and future senior indebtedness andsenior in right of payment to all of the existing and futuresubordinated indebtedness. The exchange notes will be effectivelysubordinated to all existing and future secured and unsecuredindebtedness and other liabilities of the Company's subsidiaries,including its operating partnership.

A significant portion of the operating partnership's assets havebeen pledged to secure indebtedness under the first mortgagenotes, a bank term loan and the bank credit facilities of theoperating partnership.

As of June 30, 2005, the Company had approximately $489.9 millionof aggregate indebtedness and the aggregate indebtedness of itsoperating partnership and its subsidiaries was approximately$439.5 million. The exchange notes will be non-recourse to ourgeneral partner.

AmeriGas Partners, L.P., is the nation's largest retail propanedistributor, serving nearly 1.3 million customers from over 650locations in 46 states. UGI Corp. (NYSE: UGI), through itssubsidiaries, will own approximately 44 percent of the Partnershipand individual unitholders will own the remaining 56 percentassuming that the over-allotment option is not exercised.

Through its subsidiaries, AmeriGas Partners, L.P. (NYSE:APU) isthe largest retail propane distributor in the United States. ThePartnership serves residential, commercial, industrial,agricultural and motor fuel customers from over 650 retaillocations in 46 states.

* * *

As reported in the Troubled Company Reporter on Apr. 15, 2005,AmeriGas Partners, L.P.'s -- APU -- $400 million senior notes due2015, issued jointly and severally with its special purposefinancing subsidiary Amerigas Finance Corp., are rated 'BB+' byFitch Ratings. The Rating Outlook is Stable. An indirectsubsidiary of UGI Corp. is the general partner and 44% limitedpartner for APU, which, in turn, is a master limited partnership -- MLP -- for AmeriGas Propane, L.P. -- AGP, an operating limitedpartnership. Proceeds from the new senior notes will be utilizedto repurchase outstanding 8.875% APU senior notes pursuant to anongoing tender offer.

In the ordinary course of business, the Debtor maintains varioustypes of insurance policies, including one with Mepco AcceptanceCorporation. The Mepco Policies bear a $2,264,348 total annualpremium, which sum Anchor Glass wishes to finance in accordancewith a Premium Finance Agreement with Mepco.

The Policies are extremely valuable, Robert A. Soriano, Esq., atCarlton Fields PA, in Tampa, Florida, tells Judge Paskay.Moreover, it is essential to maintain the coverage under thePolicies to preserve Anchor's property, assets and business.

Mr. Soriano says that Anchor Glass has been unable to locate anysource of unsecured premium financing.

Under the Finance Agreement, the premium for the Policies grantsMepco a security interest in the gross unearned premiums thatwould be payable in the event of cancellation of the insurancepolicies, Mr. Soriano explains.

In addition, Mepco is authorized to assess and collect latecharges not exceeding 5% of the monthly installment if aninstallment is 10 days or more past due. Mepco is alsoauthorized to cancel the financed insurance policies and obtainthe return of any unearned premiums in the event of an uncureddefault in the payment of any installment due.

ANCHOR GLASS: Wants Open-Ended Deadline to Decide on Leases-----------------------------------------------------------Anchor Glass Container Corporation asks the U.S. Bankruptcy Courtfor the Middle District of Florida to extend its deadline todecide on real property, railroad track and pipe, and publicwarehouse space leases until the confirmation of a plan ofreorganization.

The Debtor operates glass container manufacturing plants locatedthroughout central and eastern United States. Anchor Glass leasesfacilities that are used as its machine and mold shops, as well asadditional warehouse space for finished products in variouslocations throughout the country. Anchor is also a party toseveral sidetrack pipe leases and track leases with variousrailroad companies, as well as leases for public warehouses.Anchor's administrative and executive offices located in Tampa,Florida, are also leased.

Kathleen S. McLeroy, Esq., at Carlton Fields, P.A., in Tampa,Florida, relates that currently, the Debtor is still analyzingits leases and executory contracts to determine which should beassumed or rejected.

Section 365(d)(4) of the Bankruptcy Code provides that "if thetrustee does not assume or reject an unexpired lease ofnonresidential real property under which the debtor is the lesseewithin 60 days after the date of the order for relief, or withinsuch additional time as the court, for cause, within such 60 daysperiod, fixes, then such lease is deemed rejected, and thetrustee shall immediately surrender such nonresidential realproperty to the lessor."

Ms. McLeroy tells Judge Paskay that without an extension, Anchorwill not be able to complete its analysis of which leases shouldbe assumed or rejected by the current deadline. If the leasesare hastily decided, the estates might be exposed to unnecessaryadministrative claims.

The Court will convene a hearing on October 31, 2005 at 9:00 a.m.to consider the Debtor's request.

AOL LATIN AMERICA: Has Until Jan. 23 to File Reorganization Plan----------------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware approvedAmerica Online Latin America, Inc. and its debtor-affiliates'request for more time to file a chapter 11 plan. The Courtextended the Debtors' exclusive plan-filing period to Jan. 23,2006, and extended its deadline to solicit acceptances of thatplan to Mar. 21, 2006.

The principal stockholders have consented to the extension, as itwill allow the Debtors to complete the development of a consensualplan, without distraction by alternative plans of reorganizationthat might be filed by other parties.

extending the termination dates of the Agreement. AOL LatinAmerica has until Nov. 30, 2005, to file a chapter 11 planconsistent with the terms of the plan agreement. AOL LatinAmerica also has until March 31, 2006, to have the Court confirmthe plan.

* Time Warner's claims arising under or in connection with the convertible notes issued pursuant to the Note Purchase Agreement dated as of March 8, 2002, between AO Latin America and Time Warner;

* AOL's general unsecured claims;

* AOL and Time Warner's interests arising under or in connection with the Series B Redeemable Convertible Preferred Stock of AOL Latin America; and

* Aspen Investments and Atlantis Investment's interests arising under or in connection with the Series C Redeemable Convertible Preferred Stock of AOL Latin America A held by:

-- Aspen Investments, -- Atlantis Investment, -- the children of Gustavo A. Cisneros, and -- the children of Ricardo J. Cisneros

Time Warner agrees to forbear from exercising any rights orremedies it may have under the Notes, the Note Purchase Agreementand all related documents, applicable law or otherwise, withrespect to any default under the Notes or the Note PurchaseAgreement.

As previously reported in the Troubled Company Reporter onSept. 27, 2005, James R. Prince, Esq., at Baker Botts L.L.P., inDallas, Texas, informs the Court that in the ordinary course ofrepresenting ASARCO before the bankruptcy filing, Keegan receiveda $13,669 retainer. Within the 90-day period preceding thecommencement of ASARCO's Chapter 11 cases, the firm received$84,270 for professional services rendered and as reimbursementfor prepetition expenses incurred.

ASARCO will pay Keegan in accordance with the firm's customaryhourly rates, which range from $65 to $250. Keegan will also bereimbursed for the necessary out-of-pocket expenses it incurs.

As previously reported in the Troubled Company Reporter onSept. 19, 2005, within the 90-day period preceding thecommencement of ASARCO's Chapter 11 case, Anderson Kill received a$199,769 payment from ASARCO for professional services renderedand expenses incurred before the bankruptcy filing. James R.Prince, Esq., at Baker Botts LLP, in Dallas, Texas, notes thatsince March 2004, Anderson Kill has held a $100,000 retainer.

Unless otherwise ordered by the Court, Anderson Kill willcontinue to maintain the retainer and will bill ASARCO for itsfees and expenses in accordance with the Bankruptcy Code, andwill file applications for compensation and reimbursement as maybe appropriate.

The firm's professionals that will primarily provide services toASARCO and their hourly rates are:

In addition, Anderson Kill has a contingency arrangement withASARCO with regard to the firm's efforts to recover insuranceproceeds on ASARCO's behalf from London Market Companies.Pursuant to that arrangement, Anderson Kill will also receive 5%of the insurance proceeds that it recovers in addition to anyexpenses incurred.

ASARCO LLC: Wants to Resume Payment of Disability Benefits----------------------------------------------------------Before filing for bankruptcy protection, ASARCO, LLC, paiddisability benefits to current and former employees in theordinary course of business.

The Participants receiving short-term disability benefits areexpected to return to work in due course, while former employeesreceiving permanent disability and long-term disability paymentsare not expected to return to work due to their disabilities.

Under the benefit programs, former employees receive monthlypayments until the age of 65, at which time the payments ceaseand the former employees typically make application to theappropriate pension fund. In the event a Participant who wasreceiving permanent or long-term disability payments dies, theParticipant's survivor generally would receive 50% of the benefituntil the employee would have turned 65.

Since the Petition Date, ASARCO has not paid the DisabilityBenefits to former employees out of an abundance of caution.

ASARCO wants to resume paying the Disability Benefits.

In a stipulation, ASARCO, the Official Committee of UnsecuredCreditors of ASARCO and certain other parties-in-interest agreeto the payment of the Disability Benefits. The parties believethat payment of the Disability Benefits is provided by the orderof the U.S. Bankruptcy Court for the Southern District of Texas,Corpus Christi Division, authorizing payment of prepetitionemployee wage and benefit obligations.

Other signatories to the Stipulation are:

1. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union;

2. The Official Committee of Unsecured Creditors of Debtor Subsidiaries Capco & LAQ, et al.; and

Furthermore, the United Steelworkers maintains that payments mustbe paid under Section 1114 of the Bankruptcy Code. In any event,the parties agree that payment of the Disability Benefits shouldresume in light of the nature of the payments, the relativelysmall dollar amounts at issue, and the potential negative impacton the Participants if the Disability Benefits are not restored.

BLACK WARRIOR: Buying All Outstanding BobCat Shares for $51.5 Mil.------------------------------------------------------------------Black Warrior Wireline Corp. (OTCBB-BWWL) entered into a letter ofintent to purchase from the holders of all of the outstandingequity securities of BobCat Pressure Control, Inc. The purchaseprice is $51.5 million, less the amount of long-term debt,including current maturities, payable in cash at the closing ofthe transaction.

The closing of the BobCat acquisition is subject to the completionby the Company of due diligence inquiries into BobCat, thenegotiation and execution of a definitive purchase agreement,completion of financing for the transaction and fulfillment ofcustomary closing conditions to be contained in the definitivepurchase agreement. It is intended that the purchase price forthe BobCat securities will be financed with the proceeds ofadditional senior secured borrowings, a portion of which, if theacquisition is completed, is expected will be repaid using aportion of the proceeds from the proposed underwritten offering.

Black Warrior Wireline Corp. is an oil and gas service companyproviding services to oil and gas well operators primarily in theUnited States and in the Gulf of Mexico. It is headquartered inColumbus, Mississippi.

Black Warrior is offering to exchange one share of Common Stockfor each three warrants and the offer has been extended to theholders of 18,067,500 common stock purchase warrants.

Each warrant represents the right to purchase one share of CommonStock at an exercise price of $0.75 per share.

The offer to exchange shares of Common Stock for warrants willremain open for acceptance by the holders of the 18,067,500warrants through 6:00 PM Central Time on November 7, 2005.

The commencement of the exchange offer is the initial step of aseries of steps intended to be undertaken by Black Warrior for thepurpose of recapitalizing the Company through the elimination ofthe substantial amount of derivative securities it hasoutstanding. These derivative securities include common stockpurchase warrants to purchase 70,761,185 shares of Common Stockand $42,477,902 of principal amount and accrued interest, as ofSeptember 30, 2005, of its outstanding convertible subordinatednotes which, as of that date, are convertible at a conversionprice of $0.75 per share into an aggregate of 56,637,203 shares ofCommon Stock.

Additional steps the Company intends to seek to accomplish inconnection with its recapitalization include a 1-for-10 reversestock split, an underwritten public offering of shares of theCompany's Common Stock and, subject to meeting all listingrequirements, listing its shares for trading on the Nasdaq StockMarket.

Agreements with Warrant Holders

Prior to commencing the exchange offer, Black Warrior entered intoagreements with the holders of 52,693,685 warrants to exchangethose warrants for 17,564,562 shares of Common Stock. Of the52,693,685 warrants:

* an aggregate of 40,755,276 are held by St. James Capital Partners, L.P. and SJMB, L.P., private investment funds; and

* 11,938,409 are held by Charles E. Underbrink and his family and other related entities.

Mr. Underbrink is a Director of Black Warrior and is the Chairmanof the general partners of St. James Capital Partners, L.P., andSJMB, L.P. The exchange of warrants for shares of Common Stock byMr. Underbrink and his related entities was completed on Oct. 6,2005 and the exchange with St. James Capital Partners, L.P. andSJMB, L.P. will be completed prior to or on June 30, 2006.

The Agreements with St. James Capital Partners, L.P., SJMB, L.P.and Mr. Underbrink and his related entities also provide that theywill convert an aggregate of $20,277,374 of principal and allaccrued interest (which amounted to $17,111,403 through September30, 2005) on Black Warrior's outstanding convertible subordinatednotes into shares of Common Stock and, subject to marketconditions, sell those shares to the Company, along with theshares issued in exchange for their warrants and an additional5,017,481 shares held by SJMB, L.P., at the closing time of aproposed underwritten public offering of Common Stock intended tobe undertaken by the Company.

The purchase price paid by the Company for such shares will be theprice per share it receives in the public offering lesscommissions and expenses of the underwriters in the publicoffering. If the public offering is not completed by June 30,2006, these agreements to convert and sell the shares in thepublic offering will expire.

Public Offering

Following the completion of the exchange offer period, BlackWarrior intends to undertake to complete an underwritten publicoffering of shares of its Common Stock. The primary purposes ofthe offering will be to raise capital for the Company, includingfor the possible repayment of a portion of the Company's seniorsecured indebtedness, the repayment of any then remainingoutstanding convertible subordinated note indebtedness, therepurchase of the shares of the Company's Common Stock from St.James Capital Partners, L.P., SJMB, L.P. and the Underbrink familyentities and for general corporate purposes.

In addition, under the terms of a Registration Rights Agreement,the holders of $5,089,125 principal amount and accrued interest(as of September 30, 2005) on outstanding convertible subordinatednotes will have the right, subject to certain limitations, toinclude the shares issuable on conversion of the principal andinterest on the notes, as well as the shares of Common Stockissued in exchange for their warrants, in the registrationstatement. To the extent that the managing underwriter of thepublic offering concludes that the amount of shares included inthe offering for the account of selling stockholders must bereduced, the Company's agreement with the Underbrink familyentities provides that the Underbrink family entities will reducetheir sale of shares to the Company to enable greaterparticipation in the underwritten public offering by the sellingstockholders. The terms of the underwritten public offering andthe amount and price of the shares of Common Stock proposed to beoffered and sold have not been determined at this time.

Black Warrior Wireline Corp. is an oil and gas service companyproviding services to oil and gas well operators primarily in theUnited States and in the Gulf of Mexico. It is headquartered inColumbus, Mississippi.

The Diocese filed the Plan to meet the Court's directive. JudgeWilliams wanted Spokane to file the Plan and Disclosure Statementby October 10 to maintain exclusivity. Judge Williams also notedthat the interrelationship between the appeal from the Court'sOrders in the "property of the estate litigation" and Planconfirmation must be discussed.

According to Most Reverend William S. Skylstad, D.D., the Bishopof the Diocese of Spokane, the Plan will allow the Diocese to:

-- fairly compensate the victims of sexual abuse by clergy or others associated with the Diocese;

-- bring healing to victims, parishioners and others affected by the past acts of sexual abuse; and

-- continue its ministry and mission.

The Diocese will establish a fund for those victims who haveidentified themselves and for those who recognize their claims oridentify themselves in the future.

Specifically, the Diocese contemplates transferring on theeffective date of the Plan certain assets to the Fund, including:

* the remaining unrestricted cash;

* the net proceeds of sale of Diocese Real Property sold prior to the Effective Date;

* a pledge of the net proceeds of sale of Diocese Real Property still held by the Diocese on the Effective Date;

* the net proceeds of sale of the parish building loans or the assignment of the Loans directly to the Fund;

* proceeds contributed by settling insurers;

* the assignment of the insurance action recoveries as against non-settling insurers;

* any and all proceeds contributed by participating third parties;

* any and all proceeds from avoidance actions; and

* any additional contributions required pursuant to the Plan.

The Trusts

Bishop Skylstad relates that in full release, satisfaction anddischarge of all Tort Claims, the Reorganized Debtor will executeand deliver a settlement trust agreement and litigation trustagreement, which will establish a settlement trust and alitigation trust, on or before the Effective Date.

The Trustees of the Settlement Trust and the Litigation Trustwill assume full responsibility for:

* resolving all Tort Claims pursuant to the Settlement Trust Agreement and the Litigation Trust Agreement or the Litigation Trust Agreement;

* collecting, investing and distributing funds for the benefit of the holders of Allowed Tort Claims;

* fulfilling all other obligations under the Settlement Trust Agreement and the Litigation Trust Agreement; and

* paying the costs and expenses of the Settlement Trust and the Litigation Trust, all set forth more fully in the Settlement Trust Agreement and the Litigation Trust Agreement.

The Diocese or the Reorganized Debtor will make distributionswith respect to all Claims other than Tort Claims.

-- any earnings obtained by the Trustees from investments of the assets after the Effective Date; and

-- any and all Fund proceeds received after the Effective Date.

The Reorganized Debtor will deliver the initial funding of eachTrust based on the allocation determined by the Bankruptcy Courtas part of the confirmation process.

The allocation of the assets in the Fund as between theSettlement Trust and the Litigation Trust and any sub-trustswithin the Settlement first -- like the Future Claims Reserve -- will also be determined by the Bankruptcy Court as part of theconfirmation process.

On or before the Effective Date, the Reorganized Debtor willexecute and deliver any other agreements, assignments orcommitments to carry out the terms of the Plan or the funding ofthe Settlement Trust and the Litigation Trust.

Any funds received from the Settling Insurers and InsuranceAction Recoveries allocated to the Settlement Trust and theLitigation Trust received as of the Effective Date will also bepaid or distributed by Spokane to the Trustees to be held anddistributed in accordance with the Settlement Trust Agreement andthe Litigation Trust Agreement.

If, on the Effective Date, there remain any Insurance Actionsthat have not been resolved, Spokane may assign all rights andinterests in the Insurance Actions to the Trustees as determinedby the Bankruptcy Court as part of the confirmation process.

In the event and to the extent the Insurance Actions are assignedto the Trustees, the Trustees will substitute in any InsuranceActions as the real party-in-interest after the Effective Date.

Copies of the proposed Settlement Trust Agreement and theLitigation Trust Agreement will be filed by the Diocese 20 daysprior to the hearing on the Disclosure Statement, Bishop Skylstadexplains.

Special Arbitrator

Pursuant to the Plan, the allowance of the Tort Claims in theSettlement Trust will be evaluated and determined by a SpecialArbitrator selected by the Bankruptcy Court as part of theconfirmation process. The Special Arbitrator will:

* determine the appropriate Tier into which a Tort Claim will be placed;

* determine whether the Tort Claim is entitled to any different consideration because of mitigating or aggravating factors; and

* instruct the Trustee to pay any Allowed Tort Claims of Settling Tort Claimants in accordance with the terms of the Settlement Trust.

The Committee of Tort Litigants, the Tort Claimants' Committee,and the Future Claims Representative will suggest the names ofone or more individuals who would be willing to serve as theSpecial Arbitrator, and will notify the Diocese of thesuggestions prior to the Confirmation Hearing. The Court willselect the Special Arbitrator prior to the Effective Date.

Funding

Bishop Skylstad relates that all payments under the Plan, whichare due on the Effective Date will be funded from:

(1) the Cash on hand;

(2) the proceeds of the sale of the Diocese Real Property; and

(3) any contributions or settlements with any Participating Third Party and Settling Insurers and from the proceeds of any DIP or exit financing, if any, received by the Diocese during the course of the case or prior to or in conjunction with the Confirmation Hearing.

Moreover, the funds necessary to ensure continuing performanceunder the Plan after the Effective Date will be, or may be,obtained from:

-- any Cash retained by the Reorganized Debtor after the Effective Date;

-- any Cash generated from the post-Effective Date operations of the Reorganized Debtor; and

-- any other contributions or financing which the Reorganized Debtor may obtain on or after the Effective Date.

Payments Effective Upon Tender

Whenever the Plan requires payment to be made, the payment willbe deemed made and effective upon its tender by the Diocese orthe Reorganized Debtor to the Creditor to whom payment is due.If any Creditor refuses a tender, the amount tendered and refusedwill be held by the Diocese or the Reorganized Debtor for thebenefit of that Creditor pending final adjudication of thedispute.

However, when and if the dispute is finally adjudicated and theCreditor receives the funds previously tendered and refused, theCreditor will be obliged to apply the funds in accordance withthe Plan as of the date of the tender.

While the dispute is pending and after adjudication of thedispute, the Creditor will not have the right to claim interestor other charges or to exercise any other rights which would beenforceable by the Creditor if the Diocese or the ReorganizedDebtor failed to pay the tendered payment.

Preservation of Debtor's Claims, Demands, and Causes of Action

All claims, demands, and causes of action on behalf of theDiocese or the Estate against any other Person, including but notlimited to, all Avoidance Actions arising before the EffectiveDate and all Insurance Actions, which have not been resolved ordisposed of prior to the Effective Date, are preserved in fullfor the benefit of the Reorganized Debtor, except for claims orcauses of action, cross-claims, and counterclaims which have beenreleased pursuant to the Plan or pursuant to a Final Order priorto the Effective Date.

All defenses, counterclaims, Claims and demands related to theTort Claims are preserved and transferred to the Trustees of theLitigation Trust and the Settlement Trust in accordance withSection 1123(b). The Diocese and the Reorganized Debtor willalso be entitled to assign their rights under the Plan. On theEffective Date, the Trustees and the Trust are designated as theestate representative pursuant to and in accordance with Section1123(b)(3)(B) with respect to the Insurance Actions, to theextent the Insurance Actions are assigned to the Trustees.

Discharge

On the Effective Date, the Diocese will be discharged from, andits liability will be extinguished completely in respect of anyClaim, including, without limitation, Tort Claims and Claims heldby Future Tort Claimants, and any debt, Bishop Skylstad says.

Permanent Injunction

All Persons who have held, hold, or may hold Channeled Claims orClaims against the Diocese, whether known or unknown, and theiragents, attorneys, and all others acting for or on their behalf,will be permanently enjoined on and after the Effective Datefrom:

(a) commencing or continuing in any manner, any action or any other proceeding of any kind with respect to any Claim against the Parties, the Diocese, the Reorganized Debtor, the Settlement Trust, the Litigation trust, the Trustees, or the property of the Parties;

(b) seeking the enforcement, attachment, collection or recovery by any manner or means of any judgment, award, decree, or order against the Parties or the property of the Parties, with respect to any discharged Claim or Channeled Claim;

(c) creating, perfecting, or enforcing any encumbrance of any kind against the Parties or the property of the Parties with respect to any discharged Claim or Channeled Claim;

(d) asserting any set-off, right of subrogation, or recoupment of any kind against any obligation due to the Parties with respect to any discharged Claim or Channeled Claim; and

(e) taking any act, in any manner and in any place whatsoever, that does not conform to or comply with provisions of the Plan, the Settlement Trust Agreement or the Litigation Trust Agreement.

Channeled Claims refer to the claims of the Tort Claimantsagainst the Participating Third Parties and the SettlingInsurers, which are channeled to and satisfied pursuant to theSettlement Trust or Litigation Trust.

Each Non-Settling Tort Claimant will be entitled to continue orcommence an action against the Trustees of the Litigation Trust-- in their capacity as Trustees only and not in their individualcapacity. The Non-Settling Tort Claimant will be entitled to ajury trial for the sole purpose of obtaining a judgment aspermitted by the Litigation Trust Agreement, thereby liquidatingthe Non-Settling Tort Claimant's Claim so that it may be paidwith other Allowed Tort Claims in the ordinary course of theoperations of the Litigation Trust, consistent with theprovisions of the Litigation Trust Agreement.

The holder of any judgment will be enjoined from executingagainst the Litigation Trust or its assets. In the event anyPerson takes any action that is prohibited by, or is otherwiseinconsistent with the provisions the Plan related to the release,discharge and injunction, then, upon notice to the Court by anaffected Party, the action or proceeding in which the Claim ofthe Person is asserted will automatically be transferred to theCourt for enforcement.

Administrative Claims Bar Date

All requests for payment of administrative costs and expensesincurred prior to the Effective will be served and filed with theBankruptcy Court no later than 30 days after the Effective Date.Late claims will be forever barred.

Any Claims for fees, costs, and the Chapter 11 Professionalsafter the Effective Date will be treated as part of the fees andexpenses of the Reorganized Debtor and need not be submitted tothe Bankruptcy court for approval.

Continued Corporate Existence

The Diocese will, as a Reorganized Debtor, continue to existafter the Effective Date as a separate legal entity, with allpowers of a corporation sole under the laws of the State ofWashington and without prejudice to any right to alter orterminate existence under applicable state law.

From and after the Effective Date, the Reorganized Debtor willcontinue to be managed in accordance with the principles of CanonLaw and applicable state law. The Bishop will be the soledirector of the Reorganized Debtor.

A summary of the Diocese's projected budget for fiscal years 2006and 2007, together with the actual results of Diocesan operationsfor each of the fiscal years between 2001 and 2005, is availableat no charge at:

Prior to the Effective Date, but after the Confirmation Date,each Parish will be separately incorporated as a Washington non-profit corporation. All of the deeds to Parish Real Propertywill be reformed and a trust agreement will be executed by theDiocese and Parishes to clarify that:

(1) the Diocese holds legal title only to the Parish Real Property; and

(2) each Parish holds the beneficial interest in its own Parish Real Property.

The reorganization alternatives will be reviewed by the Diocesewith the Association of Parishes and will, subject to applicablecanon law, be reviewed in a collaborative spirit.

The post-confirmation reorganization of the Parishes orreformation of the deeds relating to Parish Real Property willhave no effect whatsoever on, and will not in any way prejudiceor benefit any party to, the "Property of the Estate" litigation,the Summary Judgment Order issued by Judge Williams, and theappeal filed by the Diocese and other parties-in-interest.

If the Parish incorporation alternative is chosen, uponcompletion of the incorporation and establishment of thecorporate existence of each Parish, the Diocese, as part of thePlan, will convey legal title to the Parish Real Property to eachParish that is the owner of the Parish Property.

The Confirmation Order will specifically approve the transfer anddirect the Diocese or the Reorganized Debtor to execute thedocuments as are necessary and appropriate to carry out thetransfers.

Each Parish that is separately incorporated will be operated andgoverned in accordance with Canon Law. Any disputes regardingthe interpretation and governance of the legal structure andoperation of a Parish will be referred to the appropriate Churchagency for determination.

Dissolution of Committees

Upon the occurrence of the Effective Date, the Committees willdissolve and the members of the Committees will be released fromall rights and duties arising from or related to theReorganization Case.

Alternatives to the Plan

If the Plan is not confirmed, Bishop Skylstad points out that:

(1) the Diocese could propose another plan providing for different treatment of certain Creditors;

(2) a plan could be filed by a party-in-interest other than the Diocese; or

(3) the Bankruptcy Court, after appropriate notice and hearing, could dismiss the Reorganization Case if the Diocese or a third party is unable to confirm an alternative plan in a reasonable period of time.

The Diocese believes that the Plan is the best vehicle that iscurrently available to it to ensure an equitable and fairdistribution of compensation to all victims.

Bishop Skylstad asserts that the Plan maintains the funding ofprograms within the Diocese, which are essential to thecontinuation of the historic ministry of the religiousorganization. The ability of the Diocese to reorganize itsfinancial affairs and provide an orderly way to deal with victimsof the abuse also provides for and allows the Diocese to continueprograms that were initiated over the past several years torespond to the crisis.

A full-text copy of the Diocese's Reorganization Plan isavailable for free at:

1 Priority Employee The Diocese will assume and honor Claims employee-related policies after the Effective Date

Estimated date of distribution is varied depending on the Employee's status and use of vacation and sick leave time

Estimated amount: $13,527

Impaired

2 Prepetition Paid in full, with half of the Property Tax amount paid 30 days after the Secured Claims Effective Date and the remaining half paid six months after the Effective Date

Estimated amount: $5,303

Impaired

3 General Unsecured $500 per claim which will be paid 30 Convenience Claims days after the Effective Date or applicable Claim Payment Due

Estimated amount: unknown

Impaired

4 Parish and Catholic Estimated distribution is unknown Entity Unsecured Claims To be paid in 60 monthly payments of principal only, commencing on the month following the final distribution to holders of claims in Class 7

Estimated amount: $4,545,185

Impaired

5 General Unsecured $247,714 plus 4.5% interest per Claims annum, which will be paid monthly beginning 30 days after the Effective Date

Estimated amount: $247,714

Impaired

6 Other Tort Estimated distribution is unknown Claims To be paid from proceeds of applicable insurance to the extent available. Otherwise, no distribution

Estimated amount: unknown

Impaired

7 Tort Claims Estimated Distribution is unknown

To be paid from proceeds of Settlement Trust for the Settling Tort Claimants, and Litigation Trust for Non-Settling Tort Claimants.

Settling Tort Claimants will have Claims determined by Special Arbitrator and placed in Tiers.

Distribution will depend on Tier in which Tort Claim is placed and aggravating or mitigating factors.

Classes 1, 2, 3, 4, 5, 6 and 7 are entitled to vote on the Planand the Diocese will seek acceptances from holders of allowedclaims in these Classes. Classes 8, 9, and 10 are deemed toreject the Plan and are not allowed to vote on the Plan.

Nothing will affect the Diocese's or the Reorganized Debtor'srights and defenses with respect to any Unimpaired Claims,including all rights with respect to legal and equitable defensesto or set-offs or recoupments against the Unimpaired Claims, MostReverend William S. Skylstad, D.D., the Bishop of the Diocese ofSpokane, tells Judge Williams.

Tort Claims

The Plan provides that all Tort Claimants, including Future TortClaimants, will have their Claims treated and resolved undereither the Settlement Trust or the Litigation Trust. All TortClaimants will automatically be included in the Settlement Trustunless the Tort Claimant affirmatively elects to have his or herClaim treated under the terms of the Litigation Trust.

If a Tort Claim is Allowed, the Tort Claim will be classified intoa Tier based on criteria proposed by the Committees, the FCR andthe Diocese and finally determined by the Court. The Planrecommends a system with three tiers. The criteria for each Tierwill be set forth in the Settlement Trust and will be based oninput from the Committees, the FCR and the Diocese, and finallydetermined by the Court.

A Claimant who has suffered acts that would fit in more than onetier will only have a recovery in the tier in which the mostserious act occurred.

The parameters for each Tier will be determined at a later date.

If a Tort Claimant wishes to retain his or her right to a jurytrial to liquidate a Tort Claim, the non-settling tort claimantwill have to affirmatively elect the treatment on the Ballot sentwith the Plan.

Any jury trial of a Non-Settling Tort Claimant will be held inSuperior Court for the County of Spokane, Washington.

The Company reported a consolidated net loss of $21.3 million forthe nine months ended Aug. 31, 2005, compared to a net loss of$52.4 million in 2004. The net losses in 2004 and 2005 includedlosses from discontinued operations of $14.2 million and$47.7 million, respectively, related primarily to the Company'soperations in the People's Republic of China. For the nine monthsended Aug. 31, 2005, losses from continuing operations were$7.2 million, compared to $4.7 million in 2004. The Company'scontinuing operations includes the North American and the LatinAmerican Regions.

"We are pleased with our results so far this year in LatinAmerica. The 65% growth in revenues is proof that the strategy weadopted last year is working," said Robert Kaiser, Chairman of theBoard and Chief Executive Officer. "Although our U.S. business isprofitable, it is not where we want it to be. Our reportingdelays and issues in the Asia-Pacific Region have significantlyimpacted the region and our ability to generate new business. Inthe next several months, we will be very focused on improving theresults in the region, much as we did in Latin America not toolong ago."

On Sept. 2, 2005, the Company sold its PRC and Hong Kongoperations to Fine Day Holdings Limited, a Company formed by Mr.A.S. Horng, former Chairman and Chief Executive Officer ofCellStar Asia Corporation Limited. On Aug. 25, 2005, the Companyentered into an agreement to sell its operations in Taiwan to aformer employee of the operations. The sale is expected to closein October 2005. The financial results of these operations havebeen reclassified to discontinued operations for 2004 and 2005.

Consolidated gross profit for year-to-date 2005 declined to$36.7 million from $40 million in 2004. Gross profit as apercentage of revenues was 4.8% for the nine months ended Aug. 31,2005, compared to 6.8% for the same period of 2004.

Third Quarter 2005

The Company reported revenues in the third quarter of 2005 of$277.9 million, an increase of $76.7 million or 38.1%, compared to$201.2 million in 2004. Revenues in Latin America increased $63.1million and revenues in the U.S. increased $13.5 million comparedto the third quarter of 2004.

For the third quarter of 2005, the Company reported a consolidatednet loss of $7.6 million, compared to a net loss of $14.2 millionin 2004. The net losses in 2004 and 2005 included losses fromdiscontinued operations of $5.6 million and $12.9 million,respectively, related primarily to the Company's operations in thePRC. For the quarter ended Aug. 31, 2005, losses from continuingoperations were $2.0 million, compared to $1.2 million in 2004.

Consolidated Balance Sheet

Cash and cash equivalents at Aug. 31, 2005, were $8.7 million,compared to $13.2 million at Nov. 30, 2004.

Inventories decreased to $57.8 million at Aug. 31, 2005, from$87.3 million at Nov. 30, 2004, primarily in the Company's LatinAmerican operations. Inventory turns for the quarter endedAug. 31, 2005, based on monthly inventory balances, were 18.9turns, compared to 8.8 for the quarter ended Nov. 30, 2004. Theincrease was primarily in Latin America due to increased revenues.

Accounts payable decreased to $129.2 million at Aug. 31, 2005,compared to $162.9 million at Nov. 30, 2004, primarily in theCompany's Latin America operations.

Liquidity

The Company generated net cash from operating activities of$65 million for the nine months ended Aug. 31, 2005, compared to anet cash usage of $8.2 million for nine months ended Aug. 31,2004. During 2005, cash generated from operating activities wasprimarily from a reduction in working capital in the discontinuedoperations in Asia-Pacific as the revenue base drasticallydecreased and due to the higher inventory turns and reduction inDSO's in the Latin America Region. Cash from discontinuedoperations was used primarily in the Asia-Pacific Region to paydown notes payable and to fund the operating losses in the Asia-Pacific Region.

As of Aug. 31, 2005, the Company had borrowed $16.2 million underits domestic revolving credit facility compared to $35.8 millionat Nov. 30, 2004.

"We have been extremely pleased with the cooperation from ourlenders during the last several quarters as we worked through ourissues in the Asia- Pacific Region," said Raymond Durham, ChiefFinancial Officer. "We had a very challenging year and they haveworked with us every step of the way. We received the necessarywaivers for the first three quarters of this year and havemodified certain covenants in the loan facility as a result ofexiting Asia-Pacific."

At Aug. 31, 2005, the Company had outstanding $12.4 million of 12%Senior Subordinated Notes due in January 2007.

CellStar Corporation is a leading provider of value-addedlogistics services to the wireless communications industry, withoperations in the North American and Latin American regions.CellStar facilitates the effective and efficient distribution ofhandsets, related accessories and other wireless products fromleading manufacturers to network operators, agents, resellers,dealers and retailers. CellStar also provides activation servicesin some of its markets that generate new subscribers for wirelesscarriers. Additional information about CellStar may be found onits Web site at http://www.cellstar.com.

* * *

Going Concern Doubt

Grant Thornton LLP expressed substantial doubt about Cellstar'sability to continue as a going concern after it audited theCompany's financial statements for the period ended Nov. 30, 2004.The auditors point to the Company's:

-- $118.1 million net loss for the 2004 fiscal year;

-- covenant violations on its borrowing arrangements;

-- exit on its Asian operations that constituted a large percentage of its historical operations; and

-- experiencing restrictions in its business activities with vendors.

In June 2005, the Company disclosed that it had retained theservices of Raymond James & Associates, Inc., to act as itsinvestment banking advisor to assist the Company with theevaluation of its financial and strategic alternatives.

CELLSTAR CORP: Amends Domestic Revolving Credit Facility--------------------------------------------------------CellStar Corporation (OTC Pink Sheets: CLST) obtained on Oct. 7,an amendment to its domestic revolving credit facility modifyingcertain financial covenants going forward, and waiving any non-compliance with those covenants which would have occurred duringthe quarters ended Feb. 28, 2005, May 31, 2005 and August 31,2005. The amendments also take into consideration the financialimpact of the Company's exit of the Asia-Pacific Region.

"Our bank group has supported the Company tremendously as we'veworked through our reporting delays and issues in the Asia-PacificRegion," said Robert Kaiser, Chairman of the Board and ChiefExecutive Officer. "These amendments will allow us to move beyondthese issues and concentrate our efforts on our operations inNorth America and Latin America."

Credit Facilities

As previously reported in the Troubled Company Reporter, theCompany has an $85 million Loan and Security Agreement thatexpires in November 2006. The Facility is considered a currentliability as the lender has dominion over cash receipts related tothe Company's domestic operations. Also, the Facility contains anacceleration clause that the lenders could choose to invoke if theCompany were to default.

Funding under the Facility is limited by a borrowing base test,which is measured weekly on eligible domestic accounts receivableand inventory. Interest on borrowings under the Facility is atthe London Interbank Offered Rate or at the bank's prime lendingrate, plus an applicable margin.

The Facility is secured by a pledge of 100% of the outstandingstock of all U.S. subsidiaries and 65% of the outstanding stock ofall first tier foreign subsidiaries as defined by the Facility.The Facility is further secured by the Company's domestic accountsreceivable, inventory, property, plant and equipment and all otherdomestic real property and intangible assets. The Facilitycontains, among other provisions, covenants relating to themaintenance of minimum net worth and certain financial ratios,dividend payments, additional debt, mergers and acquisitions anddisposition of assets.

If the Company terminates the Facility prior to maturity, theCompany will incur a termination fee. The termination fee was$1.7 million as of Nov. 30, 2004, and decreases by $850,000 peryear until September 2006 and remain at $425,000 thereafter. Asof Nov. 30, 2004, the Company had borrowed $35.8 million, at aninterest rate of 5.50%, an increase of $16.5 million from$19.3 million at November 30, 2003. The increase in borrowingswas a result of the Company reducing domestic trade payables inthe second quarter of 2004 and maintaining payables at that level.Under the Facility, the Company had additional borrowingavailability of $26.4 million at Nov. 30, 2004. At Aug. 26, 2005,the Company had borrowed $15.1 million and had additionalborrowing availability of $22.1 million. The interest rate was7.00% on Aug. 26, 2005.

From February 2004 to September 2005, the Company amended theFacility and obtained waivers that:

-- modified financial covenants;

-- increased borrowing availability under the Facility;

-- extended the maturity date until November 2006; and

-- granted extensions for its failure to:

* file its Annual Report on Form 10-K for the fiscal year ended Nov. 30, 2004,

* file its Quarterly Reports on Form 10-Q for the quarters ended Feb. 28, 2005, and May 31, 2005, and

* cause its independent public accountants to deliver a letter to the trustee pursuant to the Company's indenture for its Subordinated Notes.

The Company would not have been in compliance with certaincovenants without the waivers or modifications. In addition, theCompany obtained the consent of the lender to sell its GreaterChina Operations. The Company will utilize the proceeds to reducethe borrowings under the Facility.

CellStar Corporation is a leading provider of value-addedlogistics services to the wireless communications industry, withoperations in the North American and Latin American regions.CellStar facilitates the effective and efficient distribution ofhandsets, related accessories and other wireless products fromleading manufacturers to network operators, agents, resellers,dealers and retailers. CellStar also provides activation servicesin some of its markets that generate new subscribers for wirelesscarriers. Additional information about CellStar may be found onits Web site at http://www.cellstar.com/

* * *

Going Concern Doubt

Grant Thornton LLP expressed substantial doubt about Cellstar'sability to continue as a going concern after it audited theCompany's financial statements for the period ended Nov. 30, 2004.The auditors point to the Company's:

-- $118.1 million net loss for the 2004 fiscal year;

-- covenant violations on its borrowing arrangements;

-- exit on its Asian operations that constituted a large percentage of its historical operations; and

-- experiencing restrictions in its business activities with vendors.

In June 2005, the Company disclosed that it had retained theservices of Raymond James & Associates, Inc., to act as itsinvestment banking advisor to assist the Company with theevaluation of its financial and strategic alternatives.

CKE RESTAURANTS: Board Adopts Stockholder Rights Plan----------------------------------------------------- The Board of Directors for CKE Restaurants, Inc. (NYSE: CKR)approved the adoption of a stockholder rights plan. Under thePlan, all stockholders of record as of the close of business onOct. 17, 2005, will receive a distribution of rights to purchaseshares of a newly authorized series of preferred stock. Therights become exercisable in the event that a tender offer for atleast 15 percent of CKE's common stock is announced, or anacquirer acquires at least 15 percent of the shares of the commonstock.

"Our Board of Directors has adopted the Plan to help protect thelong-term interests of the Company's stockholders. While the Planwill not prohibit the acquisition of the Company, it establishescertain rights to ensure that should any unsolicited acquisitionoccur, it would be on terms that maximize value and are equitableto all stockholders," stated Andrew F. Puzder, President and ChiefExecutive Officer. The adoption of the Plan is intended as ameans to guard against abusive takeover tactics and is not inresponse to any particular proposal.

The rights, which expire on December 31, 2008 (or on December 31,2006 if the Plan is not ratified by the Company's stockholders bythat date), will be distributed to stockholders as of the close ofbusiness on Monday, Oct. 17, 2005, the record date, as a non-taxable distribution. There will be no rights certificates issuedunless certain conditions are met. The rights are not currentlyexercisable and will initially trade with CKE's common stock.

CKE Restaurants, Inc., through its subsidiaries, franchisees andlicensees, operates some of the most popular U.S. regional brandsin quick-service and fast-casual dining, including the Carl'sJr.(R), Hardee's(R), La Salsa Fresh Mexican Grill(R) and GreenBurrito(R) restaurant brands. The CKE system includes more than3,200 locations in 44 states and in 13 countries. CKE is publiclytraded on the New York Stock Exchange under the symbol "CKR" andis headquartered in Carpinteria, California.

* * *

As reported in the Troubled Company Reporter on July 13, 2005,Standard & Poor's Ratings Services raised its ratings on quick-service restaurant operator CKE Restaurants Inc. The corporatecredit and senior secured debt ratings were raised to 'B+' from'B', and the subordinated debt rating was elevated to 'B-' from'CCC+'. The outlook is stable.

COMDIAL CORP: Wants Until Oct. 31 to Make Lease-Related Decisions----------------------------------------------------------------- Comdial Corporation and its debtor-affiliates ask the U.S.Bankruptcy Court for the District of Delaware to further extendthe period within which they can elect to assume, assume andassign, or reject their unexpired nonresidential real propertyleases. The Debtors want their decision period extended untilOct. 31, 2005.

The Debtors remind the Court that the sale of substantially all oftheir assets to Vertical Communications Acquisitions Corp. closedon Sept. 28, 2005.

The Debtors give the Court three reasons supporting the extension:

1) although the sale transaction already closed on Sept. 28, 2005, the requested extension is out of an abundance of caution on their part because Vertical Communications has not made a final decision on all the leases connected with the asset sale;

2) they do no want to assume any lease connected with the asset sale that Vertical Communications may later on decide it is not interested in; and

3) they assure the Court that the requested extension will not prejudice the lessors of those leases.

The Court will convene a hearing at 9:30 a.m., on Oct. 25, 2005,to consider the Debtors' request.

Headquartered in Sarasota, Florida, Comdial Corporation --http://www.comdial.com/-- and its affiliates develop and market sophisticated communications products and advanced phone systemsfor small and medium-sized enterprises. The Company and itsdebtor-affiliates filed for chapter 11 protection on May 26, 2005(Bankr. D. Del. Case No. 05-11492). Jason M. Madron, Esq., andJohn Henry Knight, Esq., at Richards, Layton & Finger, P.A.,represent the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listedtotal assets of $30,379,000 and total debts of $35,420,000.

CONGOLEUM CORP: Has Until Dec. 14 to Solicit Plan Acceptances------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey extendedthe deadline until Dec. 14, 2005, for Congoleum Corporation(AMEX:CGM) to solicit acceptances of its plan of reorganization.

The Debtor has reached a new agreement in principle withrepresentatives of certain secured asbestos claimants concerningtreatment of their claims, and expects to prepare a revised planand submit it to the Bankruptcy Court by Oct. 24, 2005. Congoleumintends to seek permission of the Bankruptcy Court to distribute asummary of the plan modifications promptly thereafter, soclaimants may vote on the revised plan before the new deadline. Ahearing date to consider confirmation of this modified plan ofreorganization has not been set.

Settlement Agreement

Also, Congoleum ask the Bankruptcy Court to approve a settlementagreement with Mt. McKinley Insurance Company and EverestReinsurance Company. Under the terms of the settlement, Mt.McKinley and Everest will pay $21.5 million into an escrowaccount. The escrow agent will transfer the funds to the trustfor asbestos claimants to be formed by Congoleum's plan once theplan goes effective and the Court approves the payment.

"A distribution priority issue arose among the asbestos claimantsand modifications are being finalized to resolve them," Roger S.Marcus, Chairman of the Board, said. "We believe the proposedchanges should allow us to move forward with the support necessaryfor confirmation of our plan. We do not expect a significantdelay from these changes and remain hopeful that we can emergefrom bankruptcy in the spring of 2006."

Mr. Marcus added "We continue to make progress obtaining insuranceproceeds to fund the trust for claimants. Completed insurancesettlements now total over $164 million, we have additionalsettlements being finalized, and we are in ongoing negotiationswith other carriers."

Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety ofproduct features, designs and colors. The Company filed forchapter 11 protection on December 31, 2003 (Bankr. N.J. Case No.03-51524) as a means to resolve claims asserted against it relatedto the use of asbestos in its products decades ago. DomenicPacitti, Esq., at Saul Ewing, LLP, represents the Debtors in theirrestructuring efforts. When the Company filed for protection fromits creditors, it listed $187,126,000 in total assets and$205,940,000 in total debts. At June 30, 2005, Congoleum Corp.'sbalance sheet showed a $35,939,000 stockholders' deficit, comparedto a $20,989,000 deficit at Dec. 31, 2004. Congoleum is a 55%owned subsidiary of American Biltrite Inc. (AMEX:ABL).

"The rating actions result from the poor near-term earnings andcash flow prospects for the tire manufacturer, which will causecredit protection measures to be weaker than previously expected,"said Standard & Poor's credit analyst Martin King.

Findlay, Ohio-based Cooper Tire has total debt of about$720 million. The rating outlook is negative.

Cooper has reported depressed operating results during the pastyear and is expected to continue to experience earnings pressurefor at least the next few quarters. Although sales were up 3.5%during the first half of 2005, EBITDA declined 36%. The poorresults were caused by a number of factors such as:

-- operating inefficiencies the company is experiencing while it shifts its domestic manufacturing operations toward higher margin products and increases its supply of economy tires from Asia;

-- persistently high raw material costs, which increased by $31 million in the second quarter from the same period last year;

-- start-up costs associated with a new tire plant being constructed in China; and

-- a strike during the first quarter at an important manufacturing plant.

Although the work stoppage has ended, Cooper lost sales as aresult of the strike that will not be recovered because of thecompany's capacity constraints. Cooper estimates that the strikereduced operating income by about $20 million during the firsthalf of the year.

Standard & Poor's expects Cooper to face many of the samechallenges in the second half of 2005. The company willexperience continued market share pressure because of its capacityconstraints and because order fill rates are lower than historicallevels.

In addition, Cooper expects the first-quarter labor disruption tocontinue to hurt earnings, and it will likely depress operatingincome by $6 million to $7 million in the third quarter.Furthermore, rising raw material prices will be a continuingconcern as the high price of oil drives up commodity costs (a $35million-$40 million increase is expected in the third quarter).As a result, Cooper's 2005 operating results will fallsignificantly short of our previous expectations.

During 2005, CRIIMI MAE commenced a review of its strategicalternatives, including a possible sale of the REIT. The REITrecently announced that it had reached an agreement to be acquiredby CDP Capital -- Financing Inc., a subsidiary of Caisse de depotet placement du Quebec, the pension fund for the Province ofQuebec.

According to Moody's, the rating upgrade reflects CRIIMI MAE'simproved financial performance and lower leverage. The REIT'sreturn on average equity increased to 6.22% for 2004, up from 1%in 2003. During the same period, debt as a percentage of assetsdeclined to 59%, from 72%. CRIIMI MAE's improving financialmetrics are indicative of its stronger financial flexibility,according to Moody's. The REIT's activities have been largelylimited to managing its existing mortgage securities portfolio andits debt, partially offsetting the improved fundamentals.

The review for possible upgrade reflects the benefits thatacquisition by the Caisse may produce in financial flexibility andaccess to resources. During the review, Moody's will assess thelikelihood and character of potential support from the Caisse.

These ratings were upgraded, with a review for possible upgrade:

CRIIMI MAE Inc.:

-- cumulative preferred stock Series B, to B3 from Caa2

Moody's began its review for possible upgrade of CRIIMI MAE'spreferred stock rating in March 2005.

CRIIMI MAE Inc. (NYSE:CMM) is a commercial mortgage REITheadquartered in Rockville, Maryland, USA. It reported assets of$1.1 billion and equity of $437 million as of June 30, 2005.

DELPHI CORP: Taps Skadden Arps as Lead Bankruptcy Counsel---------------------------------------------------------Delphi Corp., and its debtor-affiliates seek the U.S. BankruptcyCourt for the Southern District of New York's authority to employSkadden, Arps, Slate, Meagher & Flom LLP and affiliates as theirprincipal restructuring and bankruptcy counsel.

Delphi Chairman and Chief Executive Officer, Robert S. Miller,Jr., relates that since July 12, 2005, Skadden has performedextensive legal work for the Debtors in connection with theirongoing restructuring efforts designed to complete theirtransformation plan and to preserve the value of the company.

The Debtors entered into an engagement agreement with Skaddendated as of July 12, 2005.

The Debtors believe that continued representation by theirprepetition restructuring counsel, Skadden, is critical to theirefforts to restructure their businesses because Skadden hasbecome familiar with their business and financial and legalaffairs and, accordingly, is well-suited to guide them throughthe chapter 11 process.

According to Mr. Miller, Skadden has assisted the Debtors andtheir affiliates in connection with, among other things, actingas special corporate counsel to the Debtors and providing adviceregarding, without limitation, their efforts to effectuate aconsensual resolution with General Motors Corporation and theDebtors' major unions, attending board of directors meetings andinternal company meetings from time to time, and the preparationsfor the filing of the Debtors' Chapter 11 cases.

The Debtors have selected Skadden as their attorneys because ofthe firm's experience and knowledge in the field of debtors' andcreditors' rights and business reorganizations under Chapter 11of the Bankruptcy Code. John Wm. Butler, Jr., Esq., co-leader ofSkadden worldwide corporate restructuring practice willcoordinate the overall representation of the Debtors along withPeter Allan Atkins, Esq.

Mr. Butler has served as counsel in transactional work withdebtors, sellers, purchasers and creditors of financiallytroubled companies, in non-judicial restructurings, and inchapter 11 reorganization cases in several hundred transactionsacross North America and in international transactions located inAsia, Australia, Europe, South America and the Middle East. Mr.Butler has also represented creditors' and equity committees,secured lenders and chapter 7 trustees in numerous cases.

In addition, other members of Skadden who have been activelyinvolved in representing the Debtors prior to the Petition Datewill continue to perform services for the Debtors postpetition.

Each of the Debtors desire to employ Skadden under a generalretainer because of the extensive legal services that will berequired in connection with their chapter 11 cases.

Services To Be Rendered

Skadden will be required to:

(a) advise the Debtors with respect to their powers and duties as debtors and debtors-in-possession in the continued management and operation of their business and properties;

(b) attend meetings and negotiate with representatives of creditors and other parties-in-interest;

(c) advise and consult on the conduct of the case, including all of the legal and administrative requirements of operating in chapter 11;

(d) advise the Debtors in connection with any contemplated sales of assets or business combinations, including the negotiation of asset, stock purchase, merger or joint venture agreements, formulate and implement bidding procedures, evaluate competing offers, draft appropriate corporate 11 documents with respect to the proposed sales, and counsel the Debtors in connection with the closing of those sales;

(e) advise the Debtors on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts;

(f) provide advice to the Debtors with respect to legal issues arising in or relating to the Debtors' ordinary course of business including attendance at senior management meetings, meetings with the Debtors' financial advisors and meetings of the board of directors, and advice on employee, workers' compensation, employee benefits, executive compensation, tax, environmental, banking, insurance, securities, corporate, business operation, contracts, joint ventures, real property, press and public affairs and regulatory matters and advise the Debtors with respect to continuing disclosure and reporting obligations, if any, under securities laws;

(g) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on their behalf, the defense of any actions commenced against those estates, negotiations concerning all litigation in which the Debtors may be involved and objections to claims filed against the estates;

(h) negotiate and prepare on the Debtors' behalf plan(s) of reorganization, disclosure statement(s) and all related agreements and documents and take any necessary action on behalf of the Debtors to obtain confirmation of those plan(s);

(i) prepare on the Debtors' behalf all petitions, motions, applications, answers, orders, reports, and papers necessary to the administration of the estates;

(j) attend meetings with third parties and participate in negotiations;

(k) appear before the Court, any appellate courts, and the U.S. Trustee, and protect the interests of the Debtors' estates before those courts and the U.S. Trustee; and

(l) perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with the Debtors' chapter 11 cases and bring the Debtors' chapter 11 cases to a conclusion.

Mr. Butler assures the Court that the members, counsel andassociates of the firm of Skadden:

(a) do not have any connection with any of the Debtors, their affiliates, their creditors, the U.S. Trustee, any person employed in the office of the U.S. Trustee, or any other party-in-interest, or their attorneys and accountants,

(b) are "disinterested persons," as that term is defined in Section 101(14) of the Bankruptcy Code, and

(c) do not hold or represent any interest adverse to the Debtors' estates.

In addition, Skadden informed the Debtors that no other attorneyat Skadden is related to any United States Bankruptcy Judge forthe Southern District of New York or to the United States Trusteefor that district, except that Adlai S. Hardin III, Esq., aCorporate Restructuring associate employed by Skadden in its NewYork office, is the son of Judge Adlai Hardin.

Retainer

The Engagement Agreement provided for the implementation of aretainer program pursuant to which the Debtors paid an initialretainer of $500,000.

Skadden periodically invoiced the Debtors and drew down theInitial Retainer and was paid certain supplemental amounts toreplenish the Initial Retainer:

$1,600,000 on August 19, 2005, $2,000,000 on September 8, 2005, and $1,750,000 on September 27, 2005.

Skadden received a filing retainer of $4,000,000 to be utilizedin accordance with the Engagement Agreement to cover a portion ofthe projected fees, charges and disbursements to be incurredduring the reorganization cases.

Skadden will apply the Retainer to pay any fees, charges anddisbursements which remain unpaid as of the Petition Date andwill retain the remainder of the Retainer to be applied to anyfees, charges and disbursements which remain unpaid at the end ofthe reorganization cases.

As of October 7, 2005, the amount of the Retainer was $4,033,019.

Skadden's books and records reflect that for the period July 12,2005, through October 8, 2005, the firm received an aggregate of$9,850,000 from the Debtors, including payments received forservices rendered prior to the filing on October 8, 2005, and isinclusive of the Retainer balance of $4,033,019. The aggregateamount applied to fees, charges and disbursements for the sameperiod was $5,816,981, exclusive of the Retainer balance of$4,033,019.

Skadden's fees are based in part on its guideline hourly rates,which are periodically adjusted. Skadden will be providingprofessional services to the Debtors under its standard bundledrate schedule and, therefore, Skadden will not be seeking to beseparately compensated for certain staff, clerical and resourcecharges.

As of September 1, 2005, the hourly rates under the bundled ratestructure range from:

$585 to $835 for partners and of counsel, $560 to $640 for counsel and special counsel, $295 to $540 for associates, and $90 to $230 for legal assistants and support staff.

Skadden will continue to charge the Debtors for all otherservices provided and for other charges and disbursementsincurred in the rendition of services.

Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systemsand modules, and other electronic technology. The Company'stechnology and products are present in more than 75 millionvehicles on the road worldwide. The Company filed for chapter 11protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., andRon E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,represents the Debtors in their restructuring efforts. As ofAug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530in total assets and $22,166,280,476 in total debts. (DelphiBankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,215/945-7000)

DELPHI CORP: Gets Interim Approval to Access $950-Mil of DIP Loans------------------------------------------------------------------ After exhaustive negotiations involving their financial and legaladvisors, Delphi Corporation and its debtor-affiliates concludedthat the Financing offered by JPMorgan Chase Bank, N.A., asadministrative agent, and a syndicate of other financialinstitutions arranged by J. P. Morgan Securities, Inc., andCitigroup Global Markets Inc., presented the best option availableand would enable the Debtors to preserve their value as a goingconcern.

Robert S. Miller, Jr., Delphi Corp.'s Chairman and Chief ExecutiveOfficer, points out that the proposal received from the Agentis competitive and addresses the Debtors' working capital andliquidity needs. "The Debtors have been unable to obtain creditfrom any source on terms more favorable than those offeredpursuant to the Financing."

The Debtors engaged in good faith and extensive, arm's-lengthnegotiations with the JPMorgan Chase Bank, N.A., and CiticorpUSA, Inc. These negotiations culminated in an agreement by theAgent and CUSA to provide debtor-in-possession financing.

Letters of Credit: Up to $325,000,000 of the Revolving Facility will be available for the issuance of Letters of Credit backed by JPMorgan Chase Bank, N.A., and the other Issuing Lenders.

Borrowing Base: The amount that can be borrowed at any time is limited by the imposition of a Borrowing Base equal to the sum of:

(i) 85% of Eligible Non-GM Receivables, plus

(ii) 85% of GM Receivables, plus

(iii) Available Inventory, equal to 85% of the Net Orderly Liquidation Value of Delphi's domestic inventory, provided, however, that amount does not exceed 32.5% (increasing to 65% after a formal appraisal) of Eligible Inventory, plus

(vi) an amount equal to the excess of the aggregate amount of Secured Domestic Hedging Obligations over $75,000,000; provided that:

(x) the aggregate amount of the Fixed Asset Component will at no time account for more than 30% of the aggregate amount of the Borrowing Base, and

(y) GM Receivables will at no time account for more than 25% of the total Eligible Receivables included in the Borrowing Base.

Until the Agents have received a third party appraisal with respect to the Fixed Asset Component, the aggregate dollar amount of the Fixed Asset Component included in the Borrowing Base will be $300,000,000.

Maturity Date: The DIP Facility matures on the earliest of substantial consummation of a confirmed chapter 11 plan and October 8, 2007.

Purpose: Proceeds will be used for working capital and for other general corporate purposes.

Priority and Liens: Obligations under the Financing will constitute allowed claims having priority over any and all administrative expenses, and will be secured by a valid, binding, continuing, enforceable and fully perfected first priority senior security interest in and lien on all of the Debtors' estates.

Prepetition Agent's Recommendation for Priming Liens: The Prepetition Agent recommends that the Prepetition Secured Lenders consent and agree to the priming of their liens in the Prepetition Collateral, subject to the Court's approval of adequate protection.

DIP Lender Consent to Prepetition Secured Lenders' Subordinate Liens: The DIP Lenders have agreed that the subordinated and junior lien in favor of the Prepetition Secured Lenders upon the Prepetition Collateral is a Permitted Lien under the DIP Credit Agreement.

Carve-Out: The Agent's liens and the DIP Lenders' superpriority claim will be subject and subordinate only to:

* all fees required to be paid to the Clerk of the Bankruptcy Court and the U.S. Trustee;

* all fees and expenses incurred by a trustee under Section 726(b) of the Bankruptcy Code;

* after the occurrence and during the continuance of an Event of Default, the payment of allowed and unpaid professional fees and disbursements in an aggregate amount not exceeding $35,000,000; and

* all unpaid professional fees and disbursements incurred or accrued when no Event of Default is continuing, in an aggregate amount not exceeding $5,000,000.

Interest Rate: At Delphi's option, either:

-- 50 basis points over an averaged Federal Funds Rate plus 1.50% or

-- one, three or six month LIBOR plus 2.50%;

Default Interest: Upon the occurrence and during the continuance of any default in payment of amounts due, interest will be payable on demand at 2% above the then applicable rate.

Affirmative Covenants: Usual and customary, including reporting requirements, delivery of a Borrowing Base Certificate, collateral monitoring and review, and using best efforts to obtain a rating from S&P and Moody's on the Revolving Facility and the Term Facility.

Negative Covenants: Usual and customary, including restrictions on Liens, mergers, indebtedness, dividends, investments, dispositions of assets, and transactions with Affiliates.

Events of Default: Among others, events of default include:

* failure to pay;

* breach of covenants;

* failure to deliver a Borrowing Base Certificate when due;

* any material misrepresentation or false warranty;

* conversion of the Debtors' cases to Chapter 7, dismissal, appointment of examiner or trustee;

* approval of any superpriority claim, which is pari passu with or senior to the claims of the DIP Lenders against the Debtors; and

The Debtors seek the U.S. Bankruptcy Court for the SouthernDistrict of New York's authority to borrow from the DIP Lendersunder the DIP Credit Agreement up to an aggregate $950,000,000(inclusive of the issuance of up to an aggregate face amount of$325,000,000 of Letters of Credit), pending a final hearing. Atthe final hearing, the Debtors will seek authority to borrow thefull amount -- $2 billion.

(a) The first lease is dated as of March 30, 2001, pursuant to which a certain Learjet 60 Aircraft bearing Manufacturer's Serial Number 237 and FAA Registration Number N699DA along with engines and avionics were leased to SM 5105 LLC.

(b) The second lease is also dated as of March 30, 2001, pursuant to which a certain Bombardier CL-600-2B16 (Variant 604) Aircraft bearing Manufacturer's Serial Number 5498 and FAA Registration Number N599DA along with engines and avionics were leased to SM 5105 LLC -- the Challenger Lease.

Patrick E. Mears, Esq., at Barnes & Thornburg LLP, in GrandRapids, Michigan, notes that as security for their proposeddebtor-in-possession financing, the Debtors propose to grant tothe Postpetition Lenders liens and security interests in all ofthe Debtors' property including leaseholds but excluding certainspecified property.

Bank of America objects to the DIP Financing Motion insofar as itmay be deemed to grant to the Postpetition Lenders a lien andsecurity interest in the property that is subject to the LearjetLease and the Challenger Lease. "This property does notconstitute property of the estate within the meaning of section541 of the Federal Bankruptcy Code since the property is thesubject of true leases," Mr. Mears argues.

Bank of America also objects to the Motion insofar as it attemptsto grant to the Postpetition Lenders any interest in the LearjetLease and the Challenger Lease. In the event that the Courtdetermines otherwise, Mr. Mears asserts that the Interim andFinal Financing Orders entered in the Debtors' Chapter 11 casesshould clearly state that any interest so granted is expresslysubject to the terms of the leases and does not attach to thelessor's interests under the leases.

(2) Ad Hoc Committee of Prepetition Secured Lenders

An Ad Hoc Committee -- consisting of a group of lenders,including funds managed by DK Acquisition Partners LP and LatigoPartners under the Prepetition Credit Agreement -- asks the Courtto adjourn the hearing to consider approval of the DIP FinancingMotion on an interim basis for a short period of time to allowthe Ad Hoc Committee and the other Prepetition Secured Lenders anopportunity to study the Debtors' postpetition financing requestand to discuss with the Prepetition Agent and the Debtors theterms under which the Prepetition Secured Lenders would consentto the Debtors incurring indebtedness on a priming basis.

Allan S. Brilliant, Esq., at Goodwin Procter LLP, in New York,relates that although there was much publicity about the Debtors'intention to file for chapter 11, the actual time of the filingcame as a surprise to the members of the Ad Hoc Committee.Moreover, the Debtors did not share the terms of the Debtors'proposed postpetition financing or its adequate protectionproposal with the Prepetition Secured Lenders at any time priorto the Petition Date. "Discussions, if any, were solely with thePrepetition Agent, which is hopelessly conflicted because it isalso the agent in respect of the Debtors' proposed postpetitionfinancing," Mr. Brilliant notes.

The Ad Hoc Committee also believes that the Debtors have not -- and cannot -- satisfy their burden of proof with respect to theneed to incur postpetition indebtedness on a senior secured basisunder Section 364(d) of the Bankruptcy Code. Mr. Brilliantargues that the priming of secured parties by senior liens is anextraordinary remedy that is available to a debtor who desires toobtain postpetition credit only if (a) the debtor is unable toobtain such credit otherwise, and (b) there is adequateprotection of existing lien holders.

By their own admission, the Debtors obtained eight differentfinancing proposals, four of which would have refinanced in fullall indebtedness outstanding under the Prepetition CreditAgreement, Mr. Brilliant points out. The Debtors haveacknowledged that credit is otherwise available without priming.Given that alternative credit is available without primingthe Prepetition Secured Lenders' liens, albeit on less favorableterms to the Debtors, Mr. Brilliant asserts that the Debtors havenot satisfied the requirements of Section 364(d)(1)(A).

Moreover, Mr. Brilliant continues, the Debtors' interim requestof $950 million appears disproportionate with their immediatecash needs. The Debtors have indicated that they expect toborrow only $200 million during the first 30 days of theirchapter 11 cases. "Should the Court decide to grant the Motionon an interim basis, the Debtors should only be permitted toincur indebtedness on a postpetition interim basis sufficient toavoid irreparable harm to their businesses. Given the Debtors'current cash position and their expected borrowing needs over thenear term, it is highly unlikely that the Debtors' businesseswould suffer any harm by substantially reducing the amount ofindebtedness the Debtors may incur on an interim basis.Accordingly, the Debtors' maximum interim borrowing authorityshould be limited to their publicly disclosed borrowing needs of$200 million plus an additional $50 million to provide forexigencies."

Interim Approval

At a hearing in Manhattan on Oct. 11, 2005, John Wm. Butler, Jr.,Esq., at Skadden Arps Slate Meagher & Flom, told the HonorableRobert D. Drain that there are ongoing discussions andnegotiations about what the final adequate protection package willlook like. Mr. Butler stressed that the DIP Facility and thecompany's other continuingfinancing agreements give Delphi's worldwide operations access tomore than $4 billion of flexible working capital financing.

Representing General Motors, Martin J. Bienenstock, Esq., at WeilGotshal & Manges, said that GM is very supportive of a successfulreorganization of Delphi. Mr. Bienenstock made it clear,however, that GM and Delphi are having intense discussions aboutthe treatment and priming of set-off claims. GM and many otherparties are both Delphi customers and Delphi creditors.

Judge Drain overruled all objections not resolved or withdrawn.

The Debtors, Judge Drain observed, have represented that (i)their management and financial advisors are convinced the companyshould not operate with less than $400 million of availableliquidity and (ii) they are unlikely to draw more than$565,000,000 before the Final DIP Financing Hearing a few weeksfrom now on October __, 2005. Mr. Butler has stressed thatDelphi's suppliers' confidence is predicated on adequateliquidity. On that basis, Judge Drain authorized Delphi toborrow up to $950,000,000 (which includes $350,000,000 to backletters of credit) under the DIP Credit Agreement backed byJPMorgan Chase Bank, N.A., and Citicorp USA, Inc., on an interimbasis.

Judge Drain indicated that he wants the period during which theto-be-appointed Creditors' Committee has the right to investigatethe prepetition lenders' liens extended to 120 days.

Judge Drain obtained confirmation from Mr. Butler that the Carve-Out is comprehensive (meaning it includes folks who'd typicallycomplain if they were excluded) and does not kick in unless anduntil there is an actual event of default under the DIP Facility.

Kenneth S. Ziman, Esq., at Simpson Thacher & Bartlett LLP,representing the Prepetition Lending Group, did not object to theDebtors' interim request. Mr. Ziman made it clear on the recordthat his clients are reserving all of their rights with regard tothe Final DIP Order.

Donald S. Bernstein, Esq., at Davis Polk & Wardwell, whorepresents the DIP Agent and the Joint Lead Arrangers, raisedminor concerns over some defined terms, all of which are clericalrather than substantive.

Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systemsand modules, and other electronic technology. The Company'stechnology and products are present in more than 75 millionvehicles on the road worldwide. The Company filed for chapter 11protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., andRon E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,represents the Debtors in their restructuring efforts. As ofAug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530in total assets and $22,166,280,476 in total debts. (DelphiBankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,215/945-7000)

DELPHI CORP: Court Allows Interim Use of Cash Collateral-------------------------------------------------------- As of October 8, 2005, Delphi Corporation says it owesapproximately $2,579,783,051.85 under its Prepetition CreditAgreement -- that certain Third Amended and Restated CreditAgreement, dated as of June 14, 2005, among Delphi, as borrower,JPMorgan Chase Bank, N.A., as administrative agent, the lendersfrom time to time party thereto, Citicorp USA, Inc., assyndication agent, Credit Suisse First Boston, Deutsche Bank AG,New York Branch, and HSBC Bank USA, as co-documentation agentsfor the revolving facility, Deutsche Bank AG, New York Branch, asdocumentation agent for the term facility, J.P. Morgan SecuritiesInc. and Citigroup Global Markets Inc., as joint bookrunners forthe revolving facility, J.P. Morgan Securities Inc., CitigroupGlobal Markets, Inc., and Deutsche Bank Securities Inc., as jointbookrunners for the term facility, J.P. Morgan Securities Inc.and Citigroup Global Markets, Inc., as joint lead arrangers.

Delphi's obligations fall into three buckets:

$1,500,000,000.00 on account of Revolving Loans; $988,329,620.59 on account of Term Loans; and $91,453,431.26 of L/C Reimbursement Obligations. ----------------- $2,579,783,051.85 =================

All of Delphi's obligations, as borrower, and the SubsidiaryDebtors' obligations, as guarantors, are secured by securityinterests in substantially all of the material tangible andintangible assets of Delphi and the Existing Guarantors.

The Prepetition Collateral Package does not include about $1.2billion of receivables generated by Delphi and Delphi AutomotiveSystems LLC (including in its capacity as successor by merger toDelco Electronics Corporation). In addition, the PrepetitionSecured Lenders do not have perfected security interests in:

(a) real property located in jurisdictions that impose material real estate recording taxes and other real property to the extent that the Prepetition Secured Lenders did not obtain a valid mortgage or deed of trust or otherwise failed to perfect their security interest therein,

(b) real property with a value less than $5 million, and

(c) the capital stock of foreign subsidiaries pledged under the Existing Agreements to the extent that local law requirements were not satisfied.

A portion of the Revolving Loans may not be secured by DomesticManufacturing Plant or Facility and shares of stock orindebtedness of any U.S. subsidiary of Delphi that owns DomesticManufacturing Property.

In the ordinary course of their operations, John Wm. Butler, Jr.,Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, relates, theDebtors generate cash from their use of the PrepetitionCollateral pledged to the Prepetition Secured Lenders.

The Debtors will use this cash in the normal course of theirbusinesses to finance their operations, make essential paymentsincluding employee salaries, payroll, taxes, the purchase ofgoods, materials, and for other general corporate and workingcapital purposes.

As of October 8, 2005, John D. Sheehan, Delphi's ChiefRestructuring Officer told Judge Gonzalez, the Debtors have acash balance of approximately $500,000,000. For the first 30days of Delphi's chapter 11 cases, Mr. Sheehan projects thecompany's cash balances will decline:

The Debtors ask the U.S. Bankruptcy Court for the SouthernDistrict of New York for authority to use the Cash Collateralsitting in their bank accounts to pay their ongoing obligations.They also ask the Court for authority to continue using cash thatrolls in the door as customers pay their bills.

Section 363 of the Bankruptcy Code governs the Debtors' use ofproperty of the estates. Section 363(c)(1) of the BankruptcyCode provides that:

If the business of the debtor is authorized to be operated under Section . . . 1108 . . . of this title and unless the court orders otherwise, the trustee may enter into transactions, including the sale or lease of property of the estate, in the ordinary course of business, without notice or a hearing, and may use property of the estate in the ordinary course of business without notice or a hearing.

Section 363(c)(2) of the Bankruptcy Code, however, provides anexception with respect to "cash collateral" to the general grantof authority to use property of the estate in the ordinary courseset forth in section 363 of the Bankruptcy Code. Specifically, atrustee or debtor-in-possession may not use, sell, or lease "cashcollateral" under subsection (c)(1) unless:

(A) each entity that has an interest in such collateral consents; or

(B) the court, after notice and a hearing, authorizes such use, sale, or lease in accordance with the provisions of this section."

Substantially all cash generated by the Debtors' businesses as ofthe Petition Date constitutes "cash collateral," as that term isdefined in Section 363(a) of the Bankruptcy Code, and is subjectto the interest of the Prepetition Secured Lenders. The Debtorsseek to use Cash Collateral during the period commencingimmediately after the filing of their chapter 11 petitions untilthe indefeasible payment in full in cash of all Obligations totheir Secured Lenders.

Kenneth S. Ziman, Esq., at Simpson Thacher & Bartlett LLP, in NewYork, confirmed that Delphi met with his client, JPMorgan in itsrole as the Prepetition Agent, to discuss the terms under whichthe Prepetition Secured Lenders would consent to the Debtors' useof Cash Collateral. The parties agree that the PrepetitionSecured Lenders and the Prepetition Agent will receive, asadequate protection:

(1) Superpriority Administrative Priority Claims under section 507(b) of the Bankruptcy Code, for the aggregate amount of any diminution in value of the Prepetition Collateral that will be immediately junior to the DIP Lenders' claims;

(2) valid and perfected security interests and liens in and on all of the Debtors' right, title, and interest in, to, and under the Collateral securing the Debtors' Obligations under the DIP, immediately junior to the DIP Lenders' postpetition liens;

(3) payment, in cash, of all accrued but unpaid interest and fees under the Prepetition Credit Agreement at the non-default rate;

(4) monthly cash payments for accruing interest; and

(5) payment of JPMorgan's professionals' fees and expenses.

On an emergency basis, the Honorable Arthur J. Gonzalez approvedDelphi's request to dip into the Prepetition Lenders' cashcollateral Saturday afternoon. Tuesday evening, the HonorableRobert D. Drain ratified Delphi's interim authority to use thoseencumbered funds until a final permanent financing order is put inplace at later this month. Later this month, the Debtors will beasking the Bankruptcy Court to put its final stamp of approval ona new $2 billion debtor-in-possession financing facility backed byJPMorgan Chase Bank, N.A., and Citicorp USA, Inc., and primingDelphi's Postpetition Lenders's liens. Judge Drain granted Delphiinterim authority to draw up to $950 million under the DIPFacility Tuesday evening.

Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systemsand modules, and other electronic technology. The Company'stechnology and products are present in more than 75 millionvehicles on the road worldwide. The Company filed for chapter 11protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., andRon E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,represents the Debtors in their restructuring efforts. As ofAug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530in total assets and $22,166,280,476 in total debts. (DelphiBankruptcy News, Issue Nos. 2 and 3; Bankruptcy Creditors'Service, Inc., 215/945-7000)

DELPHI CORP: Trades Shares on Pink Sheets Under DPHIQ Ticker------------------------------------------------------------Delphi Corporation (OTC: DPHIQ) disclosed that effective Monday,Oct. 11, 2005, the Company's common stock will be traded under thesymbols DPHIQ on the Pink Sheets.

In light of its voluntary filing for relief under chapter 11 ofthe Bankruptcy Code on Oct. 8, 2005, Delphi has determined it willnot request a hearing to appeal the NYSE's determination tosuspend its securities including:

-- its 6-1/2% Notes due May 1, 2009,

-- its 7-1/8% debentures due May 1, 2029, and

-- the 8.25% Cumulative Trust Preferred Securities of Delphi Trust I,

from being traded on the New York Stock Exchange.

Delphi preferred shares are also trading on the Pink Sheets underthe symbol DPHAQ.

Headquartered in Troy, Michigan, Delphi Corp. -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systemsand modules, and other electronic technology. The Company'stechnology and products are present in more than 75 millionvehicles on the road worldwide. The Company filed for chapter 11protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., andRon E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,represents the Debtors in their restructuring efforts. As ofAug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530in total assets and $22,166,280,476 in total debts.

DELPHI CORP: Judge Drain Okays Essential Vendor Payment Program--------------------------------------------------------------- Delphi Corporation and its debtor-affiliates sought and obtainedauthority from the U.S. Bankruptcy Court for the Southern Districtof New York to continue their Vendor Rescue Program and payprepetition amounts owed to critical suppliers that are essentialto the uninterrupted functioning of the Debtors' businessoperations. The Bankruptcy Court makes it clear that no creditorhas any right to compel Delphi to make any payment. Rather, theDebtors have the authority to make the payment if they believeit's in their best interest.

John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &Flom, LLP, explained the import of this program to Judge Gonzalezin graphic terms at the Bridge Order Hearing Saturday afternoonin Manhattan. If Delphi can't obtain parts or services it needs,vehicle production lines stop, plants close, workers lose theirjobs, local tax receipts dry up, and communities are wrecked.Mr. Butler related that Delphi spends some $50 million annuallydoing whatever it takes to protect and maintain a supply chainwhere inventory turns are measured in hours rather than days.

"Failure to pay the Essential Supplier Claims would, in theDebtors' business judgment," John D. Sheehan, Delphi's ChiefRestructuring Officer warned, "very likely result in theEssential Suppliers halting their provision of goods and servicesto the Debtors, in most cases because the Essential Supplierscould not afford to continue to operate their businesses if theDebtors fail to pay their prepetition claims."

Delphi stresses that payment of the Essential Supplier Claims isvital to the Debtors' reorganization efforts because theEssential Suppliers are the sole source from which the Debtorscan procure the goods and services they provide. Not paying theEssential Supplier Claims would very likely result in theEssential Suppliers' ceasing operations, thereby forcing theDebtors to try to obtain goods and services elsewhere.

Replacement goods and services, however, would not be availablefor a prolonged period and, even then, would likely be availableonly at a higher price or on terms unfavorable to the Debtors.Those replacement goods might also be incompatible with equipmentor systems currently operated by the Debtors, or not be of thequality required by the Debtors and their customers, therebycreating a devastating administrative burden on the Debtors andcausing tremendous disruptions to the Debtors' businesses.

Indeed, Delphi says, the failure to pay these claims would likelyresult in:

(a) the Debtors' inability to obtain necessary materials to produce their products,

(b) temporary shutdowns of the manufacturing facilities of the Debtors and the Debtors' original equipment manufacturer customers within as few as 24 hours from a vendor's failure to timely ship parts to the Debtors (with corresponding potentially catastrophic damage claims), and

(c) severe negative effects on the Debtors and the Debtors' OEM customers, which include many of the largest vehicle producers in the United States, and the Debtors' long-term business relationships with those customers.

These effects are primarily due to the highly integrated natureof the OEM supply chain, the Debtors' central role in the supplychain, and the OEM customers' stringent quality requirements thatsignificantly limit the availability of alternative sources ofsupply.

Delphi does not intend to disclose publicly the identity of anyindividual Essential Creditors. Deirdre A. Martini, Esq.,representing the U.S. Trustee, told Judge Gonzalez that theDepartment of Justice will want that detailed information fromDelphi. Nobody balked at Ms. Martini's request at Saturday'shearing.

Delphi wants authority to spend up to $90 million to payEssential Supplier Claims -- approximately 6.9% of the Debtors'average $1.3 billion monthly disbursements to trade creditorsover the preceding 12 months.

In calculating the amount of the Essential Supplier Claims Cap,the Debtors, with FTI Consulting's assistance, carefully analyzedall of their vendors to identify the Debtors' sole sourcesuppliers, whose products are necessary for the Debtors tocontinue operating their manufacturing facilities. The Debtorsthen analyzed whether the suppliers provided goods and servicespursuant to enforceable long-term contracts and, if so, whetherenforcement of those contracts could be accomplished in a timelymanner without unduly disrupting the Debtors' businesses.

The Debtors also evaluated the financial and operational prospectsof their suppliers which are parties to enforceable contracts toidentify those suppliers whose financial or operational positionis so precarious that if the Debtors' prepetition obligations arenot paid, the suppliers' businesses would most likely fail.

Delphi used two methods of analysis to determine which of theirsuppliers were so financially or operationally constrained:

-- First, the Debtors reviewed their Financially Troubled Supplier Database, which the Debtors maintain in the ordinary course of their businesses. The FTSD contains information on all suppliers in the Vendor Rescue Program or which the Debtors are actively monitoring because the Debtors have identified those suppliers as high risk.

-- Second, the Debtors reviewed supplier information available through Open Ratings, an Internet solution provider that uses business data from inside and outside the enterprise, cleans and unifies this data, and applies proprietary analytics to deliver actionable intelligence on the performance, financial opportunities, and risks presented by the Debtors' suppliers. Utilizing the Open Ratings software, the Debtors can quantify the financial and operational stability of each of their suppliers. Upon development of the FTSD and Open Ratings reports, the Debtors' personnel who are responsible for managing and tracking the Debtors' supplier relationships, and who have an intimate knowledge of the Debtors' supplier base, reviewed and further refined the pool of suppliers which would likely be unable or unwilling to continue to provide critical goods and services if their prepetition claims remain unpaid.

FTI concluded that Delphi needed the ability to pay up to $145million of Critical Vendor Claims. The Debtors didn't want tobring that large of a request to the Bankruptcy Court.Additionally, they didn't want to run the risk of being told "no"in some exceptional cases. That prompted the Debtors toaccelerate payments totaling about $76 million to Super-CriticalVendors Thursday and Friday of last week.

The Debtors stress that the $90 million amount represents only asmall portion of the total amount of prepetition trade claimsoutstanding for all creditors. It represents the Debtors' bestestimate as to the minimum amount that must be paid to onlyEssential Suppliers:

(x) with whom the Debtors have no enforceable long-term contracts,

(y) with whom the Debtors have contracts that may be terminable for any reason, or

(z) whose financial condition is so distressed that payments to the vendor are necessary for the vendor to survive.

To minimize the amount of payments required, the Debtors requestauthority to identify Essential Suppliers in the ordinary courseof their business circumstances warrant. Identifying theEssential Suppliers now would likely cause those suppliers todemand payment in full. When determining whether a creditor isan Essential Supplier, the Debtors, in their sole discretion,will consider, among other things:

(1) whether the goods or services the creditor provides can be replaced or acquired on better terms,

(3) whether the enforcement of a contract with a vendor who refuses to ship product can be accomplished in a timely and cost-efficient manner without unduly disrupting the Debtors' operations in light of all relevant circumstances,

(4) whether failure to pay prepetition trade claims will cause the Debtors to lose significant sales or future revenue, and

(5) whether failure to pay prepetition trade claims will cause the Debtors to be unable to meet their commitments to their OEM customers, potentially incurring significant damage claims as a result.

For creditors who are not financially troubled and are parties tolong-term contracts, Mr. Butler assured Judge Gonzalez, theDebtors intend to enforce the terms of those contracts -- andhaul creditors into bankruptcy court if necessary.

The Debtors propose to condition the payment of EssentialSupplier Claims on the agreement of the individual EssentialSuppliers to continue supplying goods and services to the Debtorson MNS-2 payment terms and those other terms and conditions asare embodied in the Delphi's general terms and conditions orother more favorable trade terms, practices and programs ineffect between that supplier and the Debtors in the twelve monthsprior to the Petition Date, or other favorable trade terms as areagreed to by the Debtors and the Essential Supplier. The Debtorsreserve the right to negotiate new trade terms with any EssentialSupplier as a condition to payment of any Essential SupplierClaim.

To ensure that the Essential Suppliers deal with the Debtors onCustomary Trade Terms, the Debtors propose sending a form letterto the Essential Suppliers along with a copy of the ordergranting their motion. That letter, once agreed to and acceptedby an Essential Supplier, will be referred to as a "TradeAgreement." The Debtors seek only the authority to enter intoTrade Agreements and not a mandate that they do so.

The Debtors submit that there may be limited circumstances inwhich payment to certain Essential Suppliers, prior to or in lieuof the Debtors' and that Essential Supplier's having entered intoa Trade Agreement, is necessary to avoid causing irreparable harmto the Debtors' business operations. In those cases, the Debtorsseek authority to make payments on account of that EssentialSupplier's claims, notwithstanding the fact that followingdiligent efforts to enter into a Trade Agreement with anEssential Supplier, no Trade Agreement has been reached.

To treat those Super-Critical Vendors who received the prefundedpayments last week identically to creditors receivingpostpetition Critical Vendor Payments from Delphi, the Debtorspropose to waive their rights to assert preference claims inexchange for Trade Agreements with the recipients of theprefunded payments.

Mr. Butler stressed that Delphi doesn't intend to spend $90million in the next day or two or three. The purpose of thisprogram, he said, is to give the company the flexibility to makethe payments it determines, in its business judgment, areappropriate. It gives Delphi some tools to discipline creditorswho attempt to take advantage of the Debtors' plight.

Rogue Suppliers

Judge Gonzalez asked Mr. Butler about the use of the term "RogueSupplier" in Delphi's motion papers, wondering if it is a term ofart in the automotive industry.

"No," Mr. Butler said, "that was my hyperbole." Agreeing withJudge Gonzalez that some creditors might take offense at thatterm when they see the order approving the program, Mr. Butlerdirected Skadden's scrivener to change that term to "Non-Conforming Supplier" in the text of the order circulated tocreditors.

Autocam Objects

Autocam Corporation complains that:

(i) the proposed treatment by Delphi Corporation, et al., of Rogue Suppliers discriminates against the rights of suppliers under the Bankruptcy Code and applicable state law; and

(ii) the Debtors' proposed treatment of Prefunded Suppliers fails to clearly set forth the extent of the proposed waiver of the Debtors' causes of action under Section 547 of the Bankruptcy Code.

Patrick E. Mears, Esq., at Barnes & Thornburg LLP, in GrandRapids, Michigan, notes that the Debtors seek to conditionallypay the claims of any Rogue Supplier. Upon payment of thoseclaims, the Debtors propose that they be allowed to file a Noticeof Waiver and an Order to Show Cause, which will require theRogue Supplier to appear before the Court and demonstrate why theRogue Supplier has not violated the automatic stay provisions ofSection 362 of the Bankruptcy Code.

"By requesting the proposed relief against Rogue Suppliers, theDebtors are essentially asking [the] Court to circumvent anyprotections afforded to suppliers under the Bankruptcy Code andapplicable state law. If [the Debtors' request] is granted, anysupplier alleged to be a Rogue Supplier would have the burden ofproving that the automatic stay provisions of section 362(a) werenot violated by the supplier's conduct. The Debtors would, ineffect, not be required to plead any facts relating to thealleged violation of the automatic stay," Mr. Mears says.

Moreover, he continues, the Debtors seem to be proposing that asupplier's refusal to ship or a supplier's reliance on the termsof its contract with the Debtors would render the supplier aRogue Supplier. The Debtors' request will circumvent theprotections afforded suppliers of goods under the provisionsunder their contract and applicable law, including Section 365 ofthe Bankruptcy Code and Section 2-609 of the Uniform CommercialCode, which allows a seller of goods to suspend performance whena reasonable ground for insecurity arise.

Mr. Mears points out that the Debtors also propose specialtreatment for Prefunded Suppliers, i.e., those critical vendorsreceiving payment prior to the Petition Date. Specifically, theDebtors propose that any supplier deemed to be a PrefundedSupplier will have an opportunity to execute the Waiver inexchange for a waiver and release of any rights that the Debtorsor their estates may have under Section 547 of the BankruptcyCode to avoid the Prefunding Transfers.

"While the express language of the Motion seems to indicate thatonly the Prefunding Transfers will not be subject to avoidancepursuant to section 547 of the Bankruptcy Code, it is notentirely clear whether the Debtors are seeking to grant a waiverand release to Prefunded Suppliers with respect to only thepayments designated Prefunded Transfers, or any payments thatqualify for avoidance under section 547 of the Bankruptcy Code.Furthermore, it is unclear exactly how the Debtors willdistinguish between Prefunded Transfers and non-PrefundedTransfers," Mr. Mears says.

Thus, Autocam asserts that the Court should require the Debtorsto modify their Motion and clarify their intentions with respectto the treatment of Essential Vendors, Prefunded Suppliers andRogue Suppliers.

Mr. Butler reported that, to Delphi's delight, there have been noplant disruptions or shutdowns since the chapter 11 filing.

Mr. Butler told Judge Drain that Delphi really questioned whetherit needed Court authority to continue the Vendor Rescue Plan.The company brought it to the Court for review out of anabundance of caution and in the interest of full disclosure.Judge Drain recommended that the Debtors talk to the Creditors'Committee, once appointed, about whether any dollar cap or otherlimit should be placed on the Vendor Rescue Plan. It'spredictable that at some point, Judge Drain opined, some vendorwill require a large cash payment.

Mr. Butler indicated that the Essential Vendor Payment Program isvery similar to the programs put in place in the Collins & Aikmanand Meridian Automotive chapter 11 cases. Strict criteria mustbe met to qualify for payment. Mr. Butler said he's already hadthree calls from creditors complaining about those criteria.Delphi doesn't intend to deviate from those criteria.

Judy O'Neill, Esq., at Foley & Lardner, LLP, said her clients,ABC Technologies and Intermet, are confused about the use of thephrase "more favorable payment terms" in the draft order.

"We can assume that's favorable for the Debtors," Judge Drainsaid, as the Courtroom erupted in laughter.

Headquartered in Troy, Michigan, Delphi Corp. -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systemsand modules, and other electronic technology. The Company'stechnology and products are present in more than 75 millionvehicles on the road worldwide. The Company filed for chapter 11protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., andRon E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,represents the Debtors in their restructuring efforts. As ofAug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530in total assets and $22,166,280,476 in total debts. (DelphiBankruptcy News, Issue Nos. 1 and 3; Bankruptcy Creditors'Service, Inc., 215/945-7000)

DELTA AIR: Brings In Alston & Bird as Pension Counsel-----------------------------------------------------Delta Air Lines Inc. and its debtor-affiliates sought and obtainedpermission from the U.S. Bankruptcy Court for the SouthernDistrict of New York to employ Alston & Bird LLP as their specialpension and employee benefits counsel.

Edward H. Bastian, executive vice president and chief financialofficer of Delta Air Lines, Inc., relates that the Debtors haveselected Alston & Bird because of its extensive experience inemployee benefits. The firm has also advised the Debtors withrespect to their pension-related issues since 1984.

Alston & Bird will be employed to provide:

(a) advice and legal representation on legal matters pertaining to the qualified retirement plans of the Debtors, which include:

(c) advice and legal representation on legal matters pertaining to any welfare benefit plans of the Debtors, which include:

-- the Delta Family-Care Disability and Survivorship Plan, -- the Delta Pilots Disability and Survivorship Plan, and -- various other welfare benefit plans;

(d) advice and legal representation in connection with any governmental and regulatory matters pertaining to the Delta Plans, including representation of the Debtors before the Pension Benefit Guaranty Corporation, the Internal Revenue Service and the U.S. Department of Labor;

(e) advice and legal representation in any litigation involving the Delta Plans whether initiated before or after the Petition Date including, the case of Delta Air Lines, Inc. ERISA Litigation MDL Docket 1424, U.S. District Court, the Northern District of Georgia, and other litigation involving the Plans; and

To minimize costs, Alston & Bird is prepared to work closely withthe Debtors and each of their other retained professionals toclearly delineate their duties so as to prevent unnecessaryduplication of services whenever possible.

It is also Alston & Bird's policy to charge its clients for out-of-pocket expenses.

Alston & Bird has received a $400,000 retainer from the Debtors.

As of August 18, 2005, the firm has received $1,549,672 in feesand costs for legal services rendered within the past 12 months.Approximately $683,000 of the amount was for work performed inconnection with the Debtors' restructuring efforts and incontemplation of the Debtors' bankruptcy filing.

(i) represent or hold any interest adverse to the Debtors or their estates with respect to the matters on which the firm seeks to be employed; or

(ii) have any connections with the Debtors, any creditors or other parties-in-interest, their attorneys and accountants, or the U.S. Trustee or any of its employees.

Mr. Cook discloses that Alston & Bird previously represented, orcurrently represents, among others, First Union CommercialCorporation, in matters totally unrelated to the Debtors. FUCC isbelieved to be affiliated with Wachovia Corporation. WachoviaCorporation, as a client group, represents 1.15% of Alston &Bird's revenue for January 1, 2004, through July 31, 2005.

He also relates that Gregory L. Riggs is the former senior vicepresident - general counsel and chief corporate affairs officer ofDelta. Mr. Riggs retired from Delta on July 1, 2005, and hasjoined Alston & Bird as Senior Counsel.

As a retired employee of Delta, Mr. Riggs is entitled to variousbenefits, including medical, life, disability and retirementbenefits. As a result, Mr. Riggs is a creditor of Delta.

Mr. Cook tells the Court that, while at Alston & Bird, Mr. Riggswill not perform work on any matters that are related or connectedin any way to the benefits he may be entitled to as a formeremployee or the claims that he may hold, and will be screened offfrom all work performed by the firm related to the employeebenefit or pension matters of the Debtors.

As of September 23, 2005, the outstanding principal balance due oneach Loan is $7,947,053, for a total principal amount due on thenine Loans of $71,523,474, plus accrued interest and reimbursableexpenses relating to each Loan.

The primary collateral for the Loans consists of nine Boeing 757-200 passenger aircraft. The liens and security interests in theAircraft and the other collateral for the Loans were grantedpursuant to:

(i) nine separate Mortgage and Security Agreements, each dated November 24, 2003, each entered into by Delta in favor of Wells Fargo Bank Northwest, N.A., as Security Trustee for the benefit of the Tennenbaum Lenders and the Fuqua Family Trust; and

(ii) nine separate Mortgage Supplements No. 1, each dated November 25, 2005, each corresponding to a Mortgage and Security Agreement.

According to Thomas R. Kreller, Esq., at Milbank, Tweed, Hadley &McCloy LLP, in Los Angeles, California, all nine of the Aircraftremain in service in Delta's operating fleet and are being flownon their scheduled routes by Delta in the ordinary course ofDelta's business. However, by reason of Delta's continued use ofthe Aircraft, the Aircraft are depreciating in value.

Pursuant to Section 363(e) of the Bankruptcy Code, the use of theTennenbaum Lenders' Collateral, including the Aircraft, may beprohibited or conditioned in a manner as to provide theTennenbaum Lenders with adequate protection of their interests inthe Collateral.

Mr. Kreller notes that, under Section 363(o), the burden is onDelta to show that the Tennenbaum Lenders' interests in theCollateral are adequately protected.

The Tennenbaum Lenders ask the Court to prohibit Delta from usingthe Aircraft unless:

(i) they receive cash payments equal to the regular fully amortized payments payable to them under the Loan Agreements; and

(ii) Delta perform its maintenance obligations and insurance obligations with respect to the Collateral and provide reporting and access to books and records related to the Collateral, in each case as provided in the Loan Documents.

DELTA AIR: PBGC Supports DP3's Move to Compel Pension Payment------------------------------------------------------------- As reported in the Troubled Company Reporter on Oct. 7, 2005,DP3, Inc., doing business as Delta Pilots' Pension PreservationOrganization, asked the U.S. Bankruptcy Court for the SouthernDistrict of New York to compel the continued payment of ongoingminimum funding contributions to the retired pilots' definedbenefit plan and ongoing non-qualified pension benefit pursuant tothe CBA.

The Pension Benefit Guaranty Corporation supports DP3 Inc.'srequest to compel the Debtors to pay their postpetition pensionplan contributions to the PBGC on account of the Delta PilotsRetirement Plan pursuant to the collective bargaining agreementbetween the Debtors and their pilots.

Three pension plans sponsored by Delta Air Lines, Inc., arecovered by the PBGC's Title IV insurance program. The due datefor the next minimum funding contribution for the DeltaRetirement Plan and the Pilots Defined Benefit Pension Plan isOctober 15, 2005.

Jeffrey B. Cohen, chief counsel of the PBGC, relates that, until apension plan is lawfully terminated, it must be funded inaccordance with the minimum funding rules prescribed by Section412 of the Internal Revenue Code and the parallel provision ofTitle I of ERISA. The sponsor of the pension plan and each memberof the sponsor's controlled group must contribute to the planamounts determined annually pursuant to the minimum funding rules.The annual minimum funding contributions are payable in quarterlyinstallments. Any remaining amount due for the pension plan yearmay be contributed as a "catch up" payment up to 8.5 months afterthe close of the plan year. Upon taking over a terminated pensionplan, the PBGC becomes authorized to pursue collection of amountsowed to the plan, including any unpaid minimum fundingcontributions.

Furthermore, the Internal Revenue Code and ERISA impose astatutory lien with respect to unpaid minimum fundingcontributions that exceed $1,000,000. The PBGC has the exclusiveauthority to enforce and collect amounts due under the statutorylien. If an employer is unable to satisfy the minimum fundingstandards for a plan year without experiencing a "substantialtemporary business hardship," the employer may apply to theInternal Revenue Service for a waiver of some or all of therequired contribution.

The PBGC reserves its rights to submit further pleadingscompelling the Debtors to make postpetition pension contributionswith respect to the benefit pension plans.

(a) Photofabrication will pay EEMC the payments due under their Contract and for accounts receivable due and owing to EEMC for all financial and physical commodity transactions between them under the Contract. Photofabrication stipulates that it has no claims for offset, credits or other deductions that would reduce the amount of the accounts receivable other than payments made; and

(b) the parties will exchange a mutual release of claims related to the Contract.

The Settlement Agreement also contemplates that each liabilityscheduled by EEMC related to Photofabrication will be deemedirrevocably withdrawn, with prejudice, and to the extentapplicable expunged and disallowed in its entirety.

Edward A. Smith, Esq., at Cadwalader, Wickersham & Taft LLP, inNew York, relates that the Settlement Agreement will clearlybenefit EEMC and its creditors. The Settlement will avoid futuredisputes and litigation concerning the Contract. The SettlementAgreement will also allow EEMC to capture the value of theContract and the Accounts Receivable for its estate, whileavoiding the costs associated with possible future legal action.

Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditorsand liquidating its remaining operations. Before the companyagreed to be acquired, controversy over accounting procedures hadcaused Enron's stock price and credit rating to drop sharply.

On March 11, 2005, the Reorganized Debtors filed their 92ndOmnibus Claims Objection, pursuant to which they sought to modifyand allow Claim Nos. 22812 and 24456.

On September 11, 2003, the Texas Comptroller filed AdministrativeClaim No. 24212 against Enron for $14,679 and Priority Claim No.24273 against Enron for $2,538,981.

As part of the parties' ongoing settlement discussions, the TexasComptroller withdrew Claim Nos. 24212 and 24273. The partiesalso agreed that a $3,623,657 refund is owed to Enron and thatthe refund will be set off against the amounts owed by Enron onClaim No. 24456.

The Texas Comptroller conducted audits regarding franchise taxesfor ECTMI and RMTC for reporting years 2001, 2002, and 2003.The audits resulted in a determination of an overall deficiencydue from each of the Debtors.

As part of the parties' ongoing settlement discussion, the TexasComptroller will be allowed a priority tax claim against ECTMIfor $125,497 and a priority tax claim for $247,103 against RMTC.

After further negotiations, parties agree that:

(1) Claim No. 22812 will be allowed against EMI for $158,680 as a priority tax claim, and as a general unsecured claim for $13,351, plus interest;

(2) Claim No. 24456 will allowed against Enron for $7,584,518 as a priority tax claim, net of the set-off of the Refund plus interest;

(3) the Texas Comptroller is allowed a priority tax claim against ECTMI for $125,497 plus interest;

(4) the Texas Comptroller is allowed a priority tax claim against RMTC for $247,103 plus interest; and

(5) all scheduled liabilities related to the Texas Comptroller are disallowed in their entirety in favor of the Allowed Claims.

Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditorsand liquidating its remaining operations. Before the companyagreed to be acquired, controversy over accounting procedures hadcaused Enron's stock price and credit rating to drop sharply.

ENRON CORP: Inks Pact Resolving Claims Related to Brazos Financing------------------------------------------------------------------Reorganized Enron Corporation and its debtor-affiliates ask theU.S. Bankruptcy Court for the Southern District of New York toapprove a settlement agreement they entered into with their non-Debtor affiliates, JP Morgan Chase Bank, and Lenders in connectionwith the Brazos Financing Structure.

As previously reported, on or before the Bar Date, JPMC:

(i) as Agent on behalf of the Lenders, filed Claim No. 11224; and

(ii) on behalf of Brazos, filed Claim No. 11225,

against Enron Corp. for claims arising in connection with, amongother things, the April 14, 1997 Guaranty, the April 14, 1997Credit Agreement and the May 14, 2002 Forbearance Agreement.

In addition, JPMC filed 70 proofs of claim against the Debtorsrelating to the Brazos Financing. Each of the JPMC Claimsasserts claims in an unliquidated amount against 70 Debtorsarising out of, in connection with, or related to:

1. the Transaction Documents and any related documents;

2. the use and occupancy of Enron Center North; and

3. any acts or omissions of those Debtors, which may have harmed or caused damage to the Claimant.

On Jan. 18, 2005, JPMC filed a Request for Payment ofAdministrative Expense Claim pursuant to which it asserted thatEnron Leasing Partners, L.P., has an administrative rent claimagainst Enron and its affiliated Debtors for their use andoccupancy of Enron Center North.

On Sept. 26, 2003, Enron and several of its affiliates commencedan adversary proceeding against, among other persons, JPMC andcertain Lenders.

(i) the ELP Claim will be fully allowed as a Class 4 general unsecured claim against Enron,

(ii) the EPSC Claim will be fully allowed as a Class 4 general unsecured claim against EPSC,

(iii) the EPMC Claim will be fully allowed as a Class 4 general unsecured claim against Enron,

(iv) upon the liquidation and dissolution of EPHC, a evidenced by the filing with the Delaware Secretary of State of a Certificate of Dissolution of EPHC, the Amended EPHC Claim will be allowed in amount equal to the Net EPHC Claim as a Class 4 general unsecured claim against Enron,

(v) the Guaranty Claim will be allowed as a Class 4 general unsecured claim against Enron for $117,811,631, and

(vi) the Administrative Rent Claim will be fully allowed as an administrative claim against Enron;

(3) On the Closing Date with respect to all Allowed Claims except the EPHC Claim, and on the EPHC Dissolution Date with respect to the allowed portion of the EPHC Claim, the amount of each Allowed Claim set forth for each Settling Lender will be deemed to be assigned to the Settling Lender without the need for any additional documentation or the entry of any additional orders of the Bankruptcy Court;

(4) the distribution of the Allowed Claims will be made in accordance with the Plan and will be paid to the Settling Lenders after the deduction of any out-of-pocket fees and expenses, if any, owing to the Agent in respect of the Allowed Claims;

(5) In the event that any Settling Lender holds or owns any debt or obligations under the Credit Agreement, which were held or owned by a Named Defendant as of the Petition Date, that portion of any distributions attributable to the Guaranty Claim will be placed into the Disputed Claims Reserve in accordance with the terms and conditions of the Plan. Any holder of the Recovery Action Indebtedness will receive no distributions on account of the Recovery Action Indebtedness with respect to the Guaranty Claim until the earliest to occur of:

(a) entry of a Final Order in the Adversary Proceeding dismissing the claims and causes of action asserted against the defendant, in which case, any distributions so reserved will be released to the Agent, on behalf of the holder of Recovery Action Indebtedness;

(b) entry of a Final Order granting the relief requested in the Adversary Proceeding, in which case, any distributions so reserved will be released to Enron or its designee or, in the event that the Litigation Trust has been created and Litigation Trust Claims are assigned thereto, to the Litigation Trust, as the case may be;

(c) the entry of a Final Order declaring that the amounts attributable to the Guaranty Claim are not subject to any potential objection, offsets, or other challenges, including equitable subordination, and directing a release of the distribution that has been placed into the Disputed Claims Reserve to the Settling Lender; and

(d) entry of a Final Order compromising and settling the claims and causes of action asserted against such defendant in the Adversary Proceeding, in which case, any distributions so reserved will be released to the party entitled thereto;

(6) The Enron Parties and the Settling Lenders will release each other from all claims relating to the Synthetic Lease Transaction;

(7) On the Closing Date, each claim, other than the Allowed Claims and any counterclaim with respect to any other actions initiated by any Enron Party or any subsidiary or affiliate of an Enron Party in connection with the Synthetic Lease Transaction will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable expunged and disallowed, with respect to that portion of the claim applicable to a Settling Lender; and

(8) The rights, remedies, claims and obligations of any Lender which is not a Party to the Settlement Agreement as a Settling Lender with respect to that Remaining Lender's Loans and Notes and that Remaining Lender's interests in or under the Credit Agreement and the other Credit Documents are in no way affected, diminished, impaired or released by the Settlement Agreement. Any Remaining Lender may elect to become a Settling Lender by executing a copy of the Settlement Agreement prior to the entry of a Court Order approving the Settlement.

The Settling Parties and their pro rata share of thedistributions are:

Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditorsand liquidating its remaining operations. Before the companyagreed to be acquired, controversy over accounting procedures hadcaused Enron's stock price and credit rating to drop sharply.

ENTERGY NEW ORLEANS: Wants Until Feb. 10 To Decide on Leases------------------------------------------------------------ The Bankruptcy Code provides that a debtor must assume or rejectunexpired non-residential real property leases within 60 daysafter the Petition Date. However, Section 365(d)(4) of theBankruptcy Code provides that upon a showing of "cause" by thedebtor, a court may grant an extension of time to assume orreject unexpired leases.

Accordingly, Entergy New Orleans, Inc., asks the U.S. BankruptcyCourt for the Eastern District of Louisiana to extend the leasedecision deadline to February 10, 2006.

In determining whether cause exists for an extension, courts haverelied on several factors, including, but not limited to:

a) the significance of the leases to the debtor's business and potential chapter 11 plan;

c) whether the debtor has had time to intelligently appraise its financial situation and potential value of the leases to the formulation of a plan;

d) how the debtor's continued possession of the premises will affect the lessor;

e) whether the landlord has suffered damage that is not compensable under the Bankruptcy Code; and

f) any factors bearing on whether the debtor has had a reasonable amount of time to decide to assume to reject the leases.

Elizabeth J. Futrell, Esq., at Jones, Walker, Waechter,Poitevent, Carrere & Denegre, LLP, in Baton Rouge, Louisiana,states that it will take the Debtor additional time to determinewhether the Real Property Leases are a necessary part of itsrestoration efforts and continued operations considering thedestruction of Hurricane Katrina.

In addition, Ms. Futrell says the extension will:

a) avert the forfeiture of the Debtor's valuable assets;

b) promote the Debtor's ability to maximize the value of its Chapter 11 estate;

c) avoid incurring needless administrative expenses by minimizing the likelihood of an inadvertent rejection of a valuable lease or premature assumption of a burdensome one; and

d) permit the Debtor to decide whether the Real Property Leases are necessary for its future operations.

Moreover, Ms. Futrell assures the Court that the proposedextension does not adversely affect any substantive rights of orprejudice any of the Debtor's lessors. Any lessor may requestthe Court to fix an earlier date by which the Debtor must decideon the leases.

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.-- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provideselectric and natural gas service to approximately 190,000 electricand 147,000 gas customers within the city of New Orleans. EntergyNew Orleans is the smallest of Entergy Corporation's five utilitycompanies and represents about 7% of the consolidated revenues and3% of its consolidated earnings in 2004. Neither EntergyCorporation nor any of Entergy's other utility and non-utilitysubsidiaries were included in Entergy New Orleans' bankruptcyfiling. Entergy New Orleans filed for chapter 11 protection onSept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,Waechter, Poitevent, Carrere & Denegre, L.L.P., represent theDebtor in its restructuring efforts. When the Debtor filed forprotection from its creditors, it listed total assets of$703,197,000 and total debts of $610,421,000. (Entergy NewOrleans Bankruptcy News, Issue No. 3; Bankruptcy Creditors'Service, Inc., 215/945-7000)

ENTERGY NEW ORLEANS: Wants Court to Restrain Utility Companies-------------------------------------------------------------- In operating its business, Entergy New Orleans, Inc., obtainsutility services, including telephone, cable, water, and trashcollection from these utility companies:

Section 366(a) of the Bankruptcy Code prohibits utility companiesfrom altering, refusing or discontinuing service to a debtor forthe 20 days of a bankruptcy case. However, upon expiration ofthe Utility Stay Period, Section 366(b) provides that a utilitycompany may, but need not, terminate services if a debtor has notfurnished adequate assurance of payment

"It is imperative to the continued successful operation of theDebtor's business, and its restoration efforts in the aftermathof Hurricane Katrina, that Utility Services remain uninterruptedduring the course of this Chapter 11 Case," Elizabeth J. Futrell,Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre,LLP, in Baton Rouge, Louisiana, asserts.

In this regard, the Debtor asks the U.S. Bankruptcy Court for theEastern District of Louisiana to enjoin and restrain the UtilityCompanies from discontinuing, altering or refusing service for oron account of unpaid charges for prepetition Utility Services.

The Debtor assures the Court that it fully intends to continueits payment habits and to timely tender all postpetition paymentsfor Utility Services furnished by the Utility Companies.

If it fails to pay for the postpetition Utility Services withinfive business days after the due date prescribed in the billingstatement, the Debtor proposes that the unpaid Utility Companywill have the right to require the Debtor to pay the past duebilling statement and make a deposit. The Postpetition Depositwill be equal to the lesser of:

1. the average billing period over the last 12 months; or

2. the actual billing statement for that account for July 2005.

The Debtor will be required to post the Deposit within 10business days after the date of notice from the Utility Company.

If the Debtor fails to make the deposit within the period, theUtility Company will be free to discontinue any service withrespect to the unpaid account.

Ms. Futrell tells the Court that the Debtor's steady paymenthistory should protect the Utility Companies from an unreasonablerisk of non-payment without need of further deposit. In addition,each Utility Company would be entitled to an administrativeexpense claim, pursuant to Section 503(b)(1) of the BankruptcyCode, for any past due amounts owed by the Debtor for postpetitionUtility Services at the time of plan confirmation or at any otherrelevant claim determination date.

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.-- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provideselectric and natural gas service to approximately 190,000 electricand 147,000 gas customers within the city of New Orleans. EntergyNew Orleans is the smallest of Entergy Corporation's five utilitycompanies and represents about 7% of the consolidated revenues and3% of its consolidated earnings in 2004. Neither EntergyCorporation nor any of Entergy's other utility and non-utilitysubsidiaries were included in Entergy New Orleans' bankruptcyfiling. Entergy New Orleans filed for chapter 11 protection onSept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,Waechter, Poitevent, Carrere & Denegre, L.L.P., represent theDebtor in its restructuring efforts. When the Debtor filed forprotection from its creditors, it listed total assets of$703,197,000 and total debts of $610,421,000. (Entergy NewOrleans Bankruptcy News, Issue No. 3; Bankruptcy Creditors'Service, Inc., 215/945-7000)

GLASS GROUP: Court Okays Sale of Three Assets to STO USA for $12MM------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approvedThe Glass Group, Inc.'s request to:

a) sell certain of its assets free and clear of liens, claims and encumbrances; and

b) authorize the assumption and assignment of certain unexpired nonresidential real property leases and executory contracts and the rejection of certain unexpired leases and executory contracts pursuant to the Asset Purchase Agreement between the Debtor and STO USA, Inc.

The Court approved the sale transaction and the terms andconditions of the Asset Purchase Agreement on Oct. 6, 2005.

On Aug. 15, 2005, the Court entered an amended order approving theauction and bidding procedures for the sale of substantially allof the Debtor's assets.

Pursuant to the Court-approved bidding procedures, the Courtdetermined on Sept. 30, 2005, that STO USA submitted the highestand best offer for three of the Debtor's assets, the Flat RiverFacility located in Park Hills, Missouri and the Williamstown andMays Landing Facilities located in New Jersey.

The Court also determined that no higher or better offer was madefor the three assets other than the offer of STO.

On Oct. 3, 2006, the Debtor and STO USA executed the AssetPurchase Agreement, in which STO paid $12 million for the FlatRiver, Mays Landing and Williamstown facilities. The PurchaseAgreement also calls for the Debtor's assumption and assignment ofthe Acquired Contracts to STO USA and the Debtor's assumption ofthe Assumed Liabilities.

The Debtor tells the Court that STO USA is a good faith purchaserand is entitled to all the protections afforded in accorded bySection 363(m) of the Bankruptcy Code.

Pursuant to the Purchase Agreement, the sale transaction isexpected to close by October 28, 2005.

A full-text copy of the Asset Purchase Agreement is available fora fee at:

Headquartered in Millville, New Jersey, The Glass Group, Inc.-- http://www.theglassgroup.com/-- manufactures molded glass container and specialty products with plants in New Jersey andMissouri. Its products include cosmetic bottles, pharmaceuticalvials, specialty jars, and coated containers. The Company filedfor chapter 11 protection on Feb. 28, 2005 (Bankr. D. Del. CaseNo. 05-10532). Derek C. Abbott, Esq., at Morris, Nichols, Arsht &Tunnell represents the Debtor in its restructuring efforts. Whenthe Debtor filed for protection from its creditors, it estimatedassets and debts of $50 million to $100 million.

GLASS GROUP: Panel Wants Court to Reconsider Asset Sale Order------------------------------------------------------------- The Official Committee of Unsecured Creditors of The Glass Group,Inc., ask the U.S. Bankruptcy Court for the District of Delawareto enter an order:

a) modifying its Sale Order dated Oct. 6, 2005, approving the sale of certain assets to STO USA, Inc., by striking paragraph 38 of the Order and to reconsider the Sale Order; or

b) staying the Sale Order pending the appeal of the Committee.

The Committee reminds the Court that it entered an order approvingthe sale of the Debtor's Flat River, Mays Landing and Williamstownfacilities to STO USA for $12 million on Oct. 6, 2005.

Gujarat Glass Ltd., a foreign corporation and competitor of theDebtor and STO reappeared literally minutes after the Court signedthe Sale Order and advised the Court that it was prepared to signan asset purchase agreement on the same terms and conditions asthe STO Agreement, except that the purchase price was $4 millionor 25% higher than STO's bid for the three facilities.

But the Court upheld the STO bid on the grounds that the Gujaratbid was not supported by the labor unions representing the workersin the three Glass Group facilities and by CapitalSource FinanceLLC, the Debtor's DIP lender.

The Committee presents two grounds for the Court to modify andreconsider its Sale Order.

Paragraph 38 of the Sale Order Should be Stricken

First, Paragraph 38 of the Sale Order waives the effect ofBankruptcy Rules 6004(g) and 6006(d), which would serve to staythe effectiveness of the Sale Order for a 10-day period. TheCommittee is concerned that STO USA may attempt to force theDebtor to close the sale before the Committee can be heard on itsmotion.

That would place the Debtor in a position of having to make achoice between closing with STO on an accelerated basis in aneffort by STO to moot the Committee's fiduciary duty to maximizevalue for creditors of the estate.

Additionally, neither the Debtor nor STO proffered any testimonyor evidence at the sale hearing for the relief granted inparagraph 38 of the Sale Order, so there is no basis in therecord for the granting of that relief in the Sale Order.

STO's Bid Should be Denied in Favor of Gujarat's Bid

Second, the additional $4 million in Gujarat's bid is very likelyto be the difference between concluding the Debtor's chapter 11case with all administrative claims paid and a small distributionto creditors, and conversion to Chapter 7 and a pro rata paymentto chapter 11 administrative claimants that could be years away.The Committee believes that the Gujarat Bid is the highest andbest offer for the Debtor's assets and should be approved over theSTO Agreement.

Alternatively, the Committee asks the Court that it should staythe Sale Order pending the Committee's appeal.

The Committee reasons out that:

1) if a stay pending the appeal is not granted, unsecured creditors will suffer significant, irreparable harm; and

2) granting the relief it is seeking will not cause substantial harm to the other parties connected with the asset sale but would serve the public interest of the creditors and other parties-in-interest.

The Court will convene a hearing at 11:30 a.m., tomorrow,Thursday, Oct. 14, 2005, to consider the Committee's request.

Headquartered in Millville, New Jersey, The Glass Group, Inc.-- http://www.theglassgroup.com/-- manufactures molded glass container and specialty products with plants in New Jersey andMissouri. Its products include cosmetic bottles, pharmaceuticalvials, specialty jars, and coated containers. The Company filedfor chapter 11 protection on Feb. 28, 2005 (Bankr. D. Del. CaseNo. 05-10532). Derek C. Abbott, Esq., at Morris, Nichols, Arsht &Tunnell represents the Debtor in its restructuring efforts. Whenthe Debtor filed for protection from its creditors, it estimatedassets and debts of $50 million to $100 million.

At June 30, 2005, Atlanta, Ga.-based Gold Kist had total debt(adjusted for capitalized operating leases) of $246.3 million.

The CreditWatch placement follows the company's recentannouncement that it had repaid -- out of cash flow fromoperations -- all obligations under its first amended and restatedcredit agreement and its second consolidated, amended, andrestated note agreement. These obligations totaled about $62million in principal, accrued interest, and fees. In addition,the company terminated both agreements.

"Besides the permanent repayment of debt, the company continues tohave strong operating results as well as very strong creditprotection measures given the commodity orientation and volatilityof poultry processing," said Standard & Poor's credit analystJayne Ross.

Standard & Poor's will discuss with management its operating plansand financial strategies. Key to Standard & Poor's review andanalysis will be the company's ability to maintain strong creditprotection measures throughout a poultry cycle.

GREAT NORTHERN: Administrative Claims Bar Date is Nov. 4--------------------------------------------------------The Hon. Louis H. Kornreich of the U.S. Bankruptcy Court for theDistrict of Maine set Nov. 4, 2005, at 4:00 p.m., as the deadlinefor all creditors owed money by Great Northern Paper, Inc., onaccount of administrative expense claims arising from Jan. 9,2003, through Sept. 30, 2005, to file their proofs of claim.

Administrative Claimants must file written proofs of claim on orbefore the Nov. 4 Administrative Claims Bar Date and those formsmust be delivered by hand or mail:

Great Northern Paper, Inc., one of the largest producers ofgroundwood specialty papers in North America, filed for chapter 11protection on January 9, 2003 (Bankr. Maine Case No. 03-10048).The court converted the Debtor's case to a Chapter Sevenproceeding on May on May 22, 2003. Alex M. Rodolakis, Esq., andHarold B. Murphy, Esq., at Hanify & King, P.C., represent theDebtor in its restructuring efforts. When the Company filed forprotection from its creditors, it listed debts and assets of morethan $100 million each.

All creditors are invited, but not required, to attend. ThisMeeting of Creditors offers the one opportunity in a bankruptcyproceeding for creditors to question a responsible office of theDebtor under oath about the company's financial affairs andoperations that would be of interest to the general body ofcreditors.

INTERNATIONAL MILL: S&P Rates Restated $328 Million Loan at B+--------------------------------------------------------------Standard & Poor's Ratings Services affirmed its 'B+' corporatecredit rating on International Mill Services Inc. and removed itfrom CreditWatch where it was placed on September 12, 2005. Theoutlook is negative.

At the same time, Standard & Poor's assigned its 'B+' rating andrecovery rating of '3' to the company's amended and restated $328million first-lien senior secured term loan due in 2010. Inaddition, Standard & Poor's affirmed its 'B+' rating and recoveryrating of '3' on its $55 million revolving credit facility due in2009. Standard & Poor's also affirmed its 'B-' and '5' recoveryrating on the company's second-lien senior secured $50 millionterm loan due in 2011. In addition, Standard & Poor's withdrewratings it assigned to its Tube City IMS Corp. affiliate onSeptember 12, 2005, as the company did not complete a proposedtransaction.

Horsham, Pennsylvania-based IMS had total debt of about $320million as of Sept. 30, 2005.

These actions followed the company's recent announcement that ithas cancelled its recapitalization plans, which included incomeparticipating securities (IPS), because of an adverse announcementby the Canadian government regarding income trust structures. Thecompany now plans to increase its first-lien term loan by $65million and use the proceeds to:

* repay $7 million outstanding on its revolving credit facility;

* pay fees and expenses of $8.5 million; and

* make a $50 million distribution to its shareholders.

Wellspring Capital Management LLC is substantially the owner ofthe company. Standard & Poor's considered the IPSrecapitalization to be a more aggressive financial structure, asit distributed nearly all of its free cash flow to theshareholders. Although the company did not proceed with itsproposed IPS transaction, the negative outlook reflects higherdebt levels associated with the proposed dividend and thecompany's shareholders proclivity toward taking a more aggressiveposture.

"The company's financial sponsors have demonstrated a willingnessto increase the financial leverage of the company to bolster theirinvestment returns. Ratings on the company could be loweredshould its sponsors seek other transactions that further increasethe company's financial risk or if a significant downturn in thesteel industry causes its customers to become insolvent, which isunlikely in the next couple of years," said Standard & Poor'scredit analyst Paul Vastola. "Despite the volatility associatedwith IMS' key end market -- the North American steel industry -the company's performance is expected to continue to benefit froma high percentage of long-term contracts and key supplier statusto its customers."

Rating concerns center on Interpool's significant customerconcentrations, the impact of high fuel prices on global trade,and the potential cost of repatriating accumulated earnings orequity from Interpool Limited, which is registered in Barbados fortax purposes. Also considered was the adverse impact of sustainedeconomic or political instability throughout the Pacific Rim,particularly China.

With Interpool now current on all of its SEC-related filings andre-listed on the New York Stock exchange, Fitch believes that thecompany's operating results could improve over the intermediateterm. The improvement in operating results should be driven byfleet utilization remaining high, and demand for containers andchassis, which is expected to remain strong due to major expansionof the world cellular container ship fleet through 2008 coupledwith continued growth in global containerized traffic.

Over the intermediate term, management intends to strengthenInterpool's credit metrics with a goal of having the company'sunsecured debt be rated investment grade. Consideration inraising Interpool's debt from current levels will be driven by thecompany's compliance with Sarbanes-Oxley section 404,strengthening financial performance, declining leverage, andcontinued unencumbering of the balance sheet.

Interpool's interim 2005 financial performance continues toreflect favorable overall market conditions in both the containerand chassis segments. Due to higher global containerized trafficand expansion of shipping fleets via delivery of newer and largerships that require the use of a larger number of chassis andcontainers, utilization of Interpool's container and chassisfleets at June 30, 2005 equaled 97% and 96%, and was 99% and 97%,respectively, at Dec. 31, 2004.

Interpool's reported net income for the first six months endedJune 30, 2005 was $37 million, an increase of $6 million over thecompany's first half of 2004 net income of $31 million. Year-to-date 2005 net income includes non-cash income of $14 millionstemming from a change in the fair value of warrants. Also, prioryear net income reflected an insurance settlement of $5 million.Excluding the change in the fair value of the warrants, annualizedreturn on average equity was a respectable 11.40%.

Overall credit quality also remained good. Accounts receivableover 60 days past due equaled $9.8 million at both Dec. 31, 2004and June 30, 2005. Nonperforming accounts receivable totaled $12million at June 30, 2005, compared to $13 million at Dec. 31,2005. Write-offs for the six months ended June 30, 2005 equaled$0.9 million versus $0.8 million for the same period a year ago.Between the 2002 to 2004 period, annual net write-offs haveaveraged approximately 0.9% of annual revenues.

New and expanded funding and liquidity arrangements were completedduring 2005 with various financial institutions. During the firsthalf of 2005, Interpool received an additional $223 million in netfinancing commitments. As of June 30, 2005, approximately $424million, excluding $72 million, under the Container ApplicationsInternational, Inc., revolving credit facility was available forfuture use by Interpool.

Headquartered in Princeton, N.J., with roots dating to 1968,Interpool Inc. is the holding company for Interpool Limited,Interpool Container Funding, SRL, Trac Lease, Inc., and owns 50%of Container Applications International, Inc. Interpool Limitedand Interpool Container Funding, SRL, house the containerbusiness. Trac Lease houses most of the domestic chassisbusiness. CAI is a short-term lessor and serves as an outlet forInterpool's off-lease containers that are not renewed for long-term lease. Interpool is publicly traded and listed on the NewYork Stock Exchange (symbol: IPX).

INTERSTATE BAKERIES: Unions Say CBA Extension is "Unnecessary"--------------------------------------------------------------As previously reported in the Troubled Company Reporter,Interstate Bakeries Corporation and its debtor-affiliates askedthe U.S. Bankruptcy Court for the Western District of Missouri forpermission to enter into and implement agreements that extend theterms of related Collective Bargaining Agreements up to five yearsand may modify, amend, replace or otherwise change the terms andconditions of employment, including changing wages and benefitsand changing work rules or operational guidelines.

Unions Respond

(1) BCTGM

The Bakery, Confectionery, Tobacco Workers, and Grain MillersInternational Union does not oppose the Debtors' request.

However, on BCTGM's behalf, Jeffrey Freund, Esq., at Bredhoff &Kaiser, P.L.L.C., in Washington, D.C., asserts that the Debtors'request is unnecessary since collective bargaining agreementsreached during a Chapter 11 proceeding are "ordinary course"transactions that are not subject to third party objections anddo not require Court approval.

Because collective bargaining over mandatory subjects is requiredby law, and because it is a violation of a federal statute for anemployer to refuse to engage in these bargaining in good faith,collective bargaining agreements on mandatory subjects areperforce "in the ordinary course of business," Mr. Freundexplains.

Under the National Labor Relations Act, "mandatory subjects ofbargaining" include wages, hours and other terms and conditionsof employment.

"[T]he Court is without authority to disapprove collectivebargaining agreements containing nothing more than terms onsubjects that are the product of arms-length collectivebargaining," Mr. Freund emphasizes.

BCTGM represents approximately 10,000 of the Debtors' 32,600employees. BCTGM's local affiliates are parties to over 200 CBAswith the Debtors. The CBAs, Mr. Freund reports, were allnegotiated under the statutory scheme established in Section 151of the National Labor Relations Act.

(2) IBT and IAMAW

The International Brotherhood of Teamsters and the InternationalAssociation of Machinists and Aerospace Workers support BCTGM'scontentions.

"While courts acknowledge that most collective bargainingagreements do not require approval, in fact, debtors present mostof their agreements for approval, leading to at least anunnecessary proceeding, and at worst, an inappropriate level ofreview of ordinary collective agreements," Frederick Perillo,Esq., at Previant, Goldberg, Uelmen, Gratz, Miller & Brueggeman,S.C., in Milwaukee, Wisconsin, points out.

"The Court should therefore clearly express that in entertainingthis motion, there is no implication that future, garden-variety,collective agreements ought to be subject to public inspectionand objection, even though they may differ in substance orstructure from the particular agreements at issue in thismotion," Mr. Perillo says.

Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.

INTERSTATE BAKERIES: J.W. Franklin Objects to Lease Rejection-------------------------------------------------------------As reported in the Troubled Company Reporter on Sept. 13, 2005,Interstate Bakeries Corporation and its debtor-affiliates soughtthe U.S. Bankruptcy Court for the Western District of Missouri'sauthority to reject 11 unexpired non-residential real propertyleases effective as of Aug. 31, 2005, to reduce postpetitionadministrative costs:

Interstate Brands executed a commencement date addendum to theShopping Center Lease on the same date that provided for thelease commencement date as November 21, 2000, and the primarylease term as December 1, 2000, through November 30, 2005.

Michele L. Whetstone, Esq., in Blue Springs, Missouri, relatesthat the Shopping Center Lease provides for a $2,718 monthlyrental payment to J.W. Franklin, plus a Common Area Maintenanceestimate of $525 per month for 2005, through the expiration ofthe Lease. Interstate Brands' pro rata share of the Common AreaMaintenance deficiency for the year 2004 is $236.

Mr. Whetstone informs the Court that Interstate Brands has paid$66 of the 2004 Common Area Maintenance deficiency, leaving aremaining balance of $170.

Mr. Whetstone further notes that Interstate Brands, with J.W.Franklin's permission, made a special modification to the commonparking lot of the shopping center in the form of a ramp, toassist the delivery of products to the Debtor's bakery outletstore. Pursuant to the Shopping Center Lease, the Debtors wererequired to remove the ramp and restore the parking lot to itsoriginal condition. However, the Debtors have not complied tothis.

For these reasons, J.W. Franklin asks the Court to deny theDebtors' request to reject the Shopping Center Lease.

(1) has only returned one key for the Premises and has not returned a copy of the postal station key to J.W. Franklin;

(2) damaged the back door to the Premises in a way that prevented the door from properly locking, thereby leaving the Premises unsecured;

(3) failed to pay its remaining $170 balance on the 2004 CAM charges, while continuing to operate its bakery outlet store in the Premises for over 10 months postpetition;

(4) failed to give J.W. Franklin any prior notice of its intent to reject the Shopping Center Lease and vacate the Premises, thereby limiting the firm's opportunity to mitigate loss of rental income due to Interstate Brands' rejection;

(5) failed to notify J.W. Franklin of its intent to reject the Lease upon the cessation of its operations on August 4, 2005; and

"The harm [Interstate Brands] has caused [J.W. Franklin]outweighs the savings the [Debtors' Chapter 11] estate mayexperience as a result of the rejection of the subject Lease,"Mr. Whetstone contends.

Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.

Fitch does not rate the $56.9 million class D, $15.5 million classE, $36.2 million class G, or the $2.9 million class Hcertificates.

The upgrade reflects the increased credit enhancement from loanpayoffs and amortization. As of the October 2005 distributiondate, the pool's aggregate certificate balance has been reduced by56% to $445.3 million from $1.03 billion at issuance. The poolremains diverse, with the top five loans and Californiarepresenting less than 20% of the pool.

Three assets (1.4%) are being specially serviced, including two 90days delinquent (0.94%) and a real estate owned (REO) (0.42%).Losses are expected on two of these assets.

The largest specially serviced loan (0.70%) is secured by a retailproperty in Covington, VA. The loan is 90 days delinquent andforeclosure is expected. The next specially serviced asset issecured by a hotel in Monroe, PA (0.42%). This REO asset has beenmarketed for sale and is expected to be sold shortly. The thirdspecially serviced loan (0.23%) is secured by a retail property inWest Seneca, New York. Foreclosure is expected by year-end.Losses are expected on two of the specially serviced loans. ClassH is more than sufficient to absorb losses.

The upgrade to class D reflects the defeasance of an additional10.7% of the pool as well as 3.3% paydown since Fitch's previousrating action. Since issuance, 29% of the pool has defeased. Asof the September 2005 distribution date, the pool's aggregateprincipal balance has been reduced by approximately 25% to $607.0million from $814.4 million at issuance.

Four loans (1.8%) are currently being specially serviced,including three delinquent loans (1.5%). The largest of thesedelinquent loans (0.78%) is secured by an office property inLancaster, NY. The property is 65% occupied and a foreclosure isexpected before year-end. The next delinquent loan (0.55%) issecured by a multifamily property in Elgin, IL. Current occupancyis 44% and the special servicer is negotiating workout options.The loss anticipated on one of the specially serviced loans isexpected to be absorbed by class J, which is not rated by Fitch.

The pool's realized losses to date total $25.6 million, or 3.2% ofthe original pool balance.

KAISER ALUMINUM: Court Orders Russell to File Final Fee Claim-------------------------------------------------------------Judge Fitzgerald directs Russell Reynolds to file with the U.S.Bankruptcy Court for the District of Delaware a final feeapplication for allowance of its compensation and expenses inaccordance with the applicable provisions of the Bankruptcy Code,the Bankruptcy Rules and the Local Rules. Russell Reynolds maysubmit records in summary format describing the services it hasprovided and may not keep time records of hours spent performingthose services.

The Court therefore modifies and waives the informationrequirements of Bankruptcy Rule 2016 and Local Rule 2016-2 to theextent necessary, with respect to Russell Reynolds.

As reported in the Troubled Company Reporter on Sept. 19, 2005,Kelly Beaudin Stapleton, the United States Trustee for Region 3,objected to Kaiser Aluminum Corporation and its debtor-affiliates'proposal that Russell Reynolds Associates be exempted from thefiling of fee applications and the necessity to obtain furtherCourt approval for its compensation or reimbursement of expenses.

This request is contrary to relevant law, the U.S. Trustee argues.

The U.S. Trustee asserts that the U.S. Court of Appeals for theThird Circuit in In re Engel, 124 F.3d 567, 571-72 (3d Cir.1997), has made it quite clear that fee applications are arequirement in bankruptcy and must be carefully reviewed underSection 330 of the Bankruptcy Code.

The U.S. Trustee further contends that the Application fails toprovide the specific services Russell Reynolds will be providingor the justification for its fee. Moreover, the U.S. Trusteenotes that there will be expenses that the Debtors will reimburse,which are completely unknown at this time.

The U.S. Trustee tells the Court that the correct procedure is notto approve the compensation up-front without any oversight, but toallow the Court and parties-in-interest the ability to assess theservices performed at the end of the engagement to determine ifthe fees are justifiable and expenses are reasonable.

Headquartered in Foothill Ranch, California, Kaiser AluminumCorporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high-strength, general engineering, automotive, and custom industrialapplications. The Company filed for chapter 11 protection onFebruary 12, 2002 (Bankr. Del. Case No. 02-10429), and has soldoff a number of its commodity businesses during course of itscases. Corinne Ball, Esq., at Jones Day, represents the Debtorsin their restructuring efforts. On June 30, 2004, the Debtorslisted $1.619 billion in assets and $3.396 billion in debts.(Kaiser Bankruptcy News, Issue No. 80; Bankruptcy Creditors'Service, Inc., 215/945-7000)

Third-quarter 2005 net sales were $1.02 billion compared to $995million for the third quarter of 2004, representing an increase of2.4% on a reported basis and 1.8% on a constant-currency basis.The sales increase was driven primarily by increased net sales inthe Asia Pacific region, the U.S. Levi's(R) brand and the U.S.Levi Strauss Signature(R) brand. These gains were partially offsetby lower sales in the European region and the U.S. Dockers(R)brand.

Operating income increased 9 percent to $139 million for the thirdquarter, or 14% of net sales, compared to $128 million, or 13percent of net sales, for the same period of 2004. Theimprovement reflects lower restructuring charges and othercorporate expense. Net income for the third quarter decreased $8million to $38 million compared to net income of $47 million inthe same quarter of 2004. The decrease was driven by lower incometax expense in the third quarter of 2004 as a result of a tax-ratebenefit.

"We had another good quarter, consistent with our goals for thisyear," said Phil Marineau, chief executive officer. "We deliveredmodest sales growth and strong margins and operating profit in adifficult retail environment. I'm pleased with the revenue growthin Asia Pacific and in the U.S. Levi's(R) and Levi StraussSignature(R) brands. Our revenue performance in Europe is weakerthan we had hoped, but we continue to see profit improvements andbelieve we're on the right strategic course. For the balance ofthe year, we remain cautious about sales in the United States andEurope in light of energy prices and the retail environment."

Third-Quarter 2005 Results

Gross profit was essentially flat at $454 million compared to$456 million in the third quarter of 2004. The gross margindecreased 130 basis points to 44.6% of net sales for the thirdquarter compared to 45.9% of net sales in the same quarter lastyear. The gross margin in the third quarter of 2005 was primarilyaffected by a higher sales mix of lower-margin fashion andseasonal products in the United States, partially offset by a netsales increase for the Levi's(R) brand in the United States, a netsales increase for Asia Pacific, and the more premium positioningof the Levi's(R) brand in Europe.

Selling, general and administrative expenses increased $19 millionor 6% to $320 million in the third quarter of 2005 from $301million in same period of 2004. Higher SG&A expenses wereprimarily attributable to an increase in advertising and promotionexpense and higher incentive compensation costs. These werepartially offset by lower salary and wages and related expenses aswell as decreased distribution costs, reflecting the impact ofcost-savings initiatives. As a percent of sales, SG&A expenseswere 31% in the third quarter of 2005 compared to 30% in the sameperiod of 2004.

Restructuring charges, net of reversals, were $5 million for thethird quarter of 2005 versus $28 million in the prior-year period.The 2005 charges were for third-quarter 2005 activities relatedprimarily to European reorganization initiatives that began lastyear, including moving the Dockers(R) brand operation to Brusselsfrom Amsterdam. The substantially higher 2004 charges primarilyreflected costs related to the 2004 closure of two manufacturingplants in Spain and 2004 U.S. and European organizational changes.

Other operating income increased in the third quarter of 2005,driven primarily by a $5 million increase in royalty income fromlicensees. Royalty income was $16 million for the 2005 quarter,compared to $12 million in the same period last year. Theincrease reflects the company's decision last year to licensecertain product categories.

Income tax expense for the third quarter was $40 million comparedto $18 million in the comparable 2004 period. The effective taxrate for the third quarter of 2004 was significantly lower dueprimarily to a revision in the estimate of annual earnings fordomestic and foreign subsidiaries.

"We have improved our financial strength this year, deliveringstronger profitability through the first nine months of the year,"said Hans Ploos van Amstel, chief financial officer. "Ourimproved earning power has allowed us to increase our investmentin product, advertising and stronger marketing, consistent withour strategy to reinvest part of our increased profits into keybrand-building initiatives. This strategy is even more importantin light of the current competitive environment. We're alsopleased that we completed settlement discussions in late Augustwith the U.S. Internal Revenue Service relating to ourconsolidated U.S. federal corporate income tax returns for 1990 to1999. The IRS examination of those tax years is now closed."

Levi Strauss & Co. is one of the world's leading branded apparelcompanies, with sales in more than 110 countries. Levi Straussdesigns and markets jeans and jeans-related pants, casual anddress pants, tops, jackets and related accessories for men, womenand children under its Levi's(R), Dockers(R) and Levi StraussSignature(R) brands. Levi Strauss also licenses its trademarks invarious countries throughout the world for accessories, pants,tops, footwear, home and other products.

MEDIA GROUP: Wants Bernard Costich as Accountants-------------------------------------------------The Media Group, Inc., and its debtor-affiliates ask the U.S.Bankruptcy Court for the District of Connecticut for authority toretain Bernard W. Costich, CPA, as their accountant.

Bernard Costich will:

(a) prepare federal and state tax returns;

(b) review proof of claims and prepare objection where appropriate;

(c) provide litigation support;

(d) collect accounts receivable;

(e) respond to creditor and other parties of interest requests for information and documentation;

(f) supervise the disbursement of accounts receivables collected on behalf of the purchaser of the Dura Lube Assets;

(g) prepare monthly operating reports and the U.S. Trustee's quarterly fee statements; and

(h) provide such other accounting services as may be requested by the Debtors, their attorneys or the Committee and their attorneys.

The Debtors tell the Court that Bernard W. Costich will be thelead accountant and will bill $250 per hour for his services. TheDebtors also tell the Court that the Firm's accounting clerks willbill at $50 per hour. The Debtors disclose that the Firms feesshall not exceed $30,000.

To the best of the Debtor's knowledge, the Firm is a"disinterested person" as that term is defined in Section 101(14)of the Bankruptcy Code.

Headquartered in Stamford, Connecticut, The Media Group Inc.,distributes and markets automotive additives and generalmerchandise. The Company filed for chapter 11 protection onJuly 9, 2004 (Bankr. D. Conn. Case No. 04-50845). Douglas S.Skalka, Esq., at Neubert Pepe and Monteith, represents the Debtorsin their restructuring efforts. When the Debtor filed forprotection from its creditors, it listed $10,915,723 in totalassets and $14,743,552 in total debts.

Dennis J. Shaffer, Esq., at Whiteford, Taylor & Preston, LLP, inBaltimore, Maryland, argues that the claims of TCC Attala OL, VCCAttala OL, BATCL-1987 II, and Newcourt should be disallowed andexpunged in their entirety. Mr. Shaffer points out that Attaladid not address these claims in its response to NEG's Objectionsnor did Attala address these claims at the hearing held onAugust 11 and 12, 2005.

VCC Attala OL and TCC Attala OL seek $300 million in paymentsunder a tolling guaranty, to which they are not entitled, Mr.Shaffer argues. Not only has NEG already compromised and settledall claims arising under the Tolling Guaranty but the AttalaEntities have also conceded that the only parties entitled topayment under the Tolling Guaranty were the certificate holders.

Mr. Shaffer adds that the claims of Newcourt and BATCL-1987 IIshould also be disallowed because they have no right to assertclaims based on the Indemnity Agreement, which is an agreementbetween the TCC Attala OP and VCC Attala OP and NEG. Moreover,even if Newcourt and BATCL-1987 II were parties to the IndemnityGuaranty, Mr. Shaffer says, their claims duplicate the claims ofAttala Owner Participants.

According to Mr. Shaffer, for NEG to be liable to the AttalaOwner Participants under the Indemnity Guaranty, AttalaGenerating Company LLC must first be liable to the OwnerParticipants under the Tax Indemnity Agreement. AGC has noliability under the TIA to the extent that Termination Value hasbeen paid, he says.

Mr. Shaffer points out that in 10 proofs of claim and 59 pages ofbriefing, and at the Hearing, the Owner Participants have yet tosubmit to the Court any explanation of how they calculate thatNet Economic Return equals $240 million.

Mr. Shaffer argues that not only have the Attala Entities failedto submit any calculation of their claim to the Court, they havenot even reduced their claims to present value. Therefore, ifthe Court awards them any relief, Mr. Shaffer says, it should belimited to their discounted lost tax benefits, which NEGcalculates to be $6,083,505 (VCC) and $1,520,876 (TCC).

According to Mr. Shaffer, the Attala Entities also assert a claimwith no supporting documentation for over $2.3 million under thegeneral guaranty in the Participation Agreement, which NEGguaranteed in the Indemnity Guaranties.

NEG asks the Court to:

(a) disallow and expunge the Attala Claims;

(b) alternatively, with respect to the Claim No. 631, reduce and allow that claim as a general unsecured claim for $6,083,505;

(c) alternatively, with respect to the Claim No. 630, reduce and allow that claim as a general unsecured claim for $1,520,876; and

(d) deny the Attala Entities' Motion for Partial Summary Judgment.

Attala's Executive Summary

The Attala Entities believe that while the overall transactionunderlying their Claims and agreements was complex and heavilynegotiated by sophisticated parties, each represented byprofessionals, NEG's liability to the Owner Participants isultimately based on three agreements:

Merrill Cohen, Esq., at Cohen & Baldinger, in Bethesda, Maryland,points out that none of the Owner Participants' claims wereassigned to the Certificate Holders as security. The TaxIndemnity Agreements provide that the Owner Participants areentitled to receive indemnity payments, in an amount calculatedto preserve their Net Economic Return, upon the occurrence of anegotiated trigger. These indemnities are separate and apartfrom AGC's obligations to pay Equity Rent or Termination Value,Mr. Cohen says.

NEG also expressly guaranteed the Owner Participants' indemnityclaims under the Participation Agreements, Mr. Cohen relates.Like the indemnity payments under the Tax Indemnity Agreements,the Owner Participants' claims under the Participation Agreementswere specifically excluded from the property assigned to theIndenture Trustee and the Certificate Holders.

Using a combined rate of 45.8435% to gross up the lump sum inorder to preserve the Owner Participants' Net Economic Return,the Tax Indemnity Agreement Claims are:

$192,073,089 for VCC Attala OP LLC $48,018,272 for TCC Attala OP LLC

Mr. Cohen points out that Owner Participants simply calculatedtheir Claims under the express provisions of the Tax IndemnityAgreements, utilizing objective numbers and formulas, to derivethe amount of $240,091,361.

According to Mr. Cohen, the Debtors contend that allowing theOwner Participants' Claims in the amount provided for under theTax Indemnity Agreements would grant the Owner Participants a"windfall" at the expense of NEG other creditors. Mr. Cohenrefutes the Debtors' assertion and argues that at this point intime, the Owner Participants have not received anything onaccount of their Claims and have lost their investment in thetransaction through foreclosure on the Facility. "What the OwnerParticipants seek here is to merely receive the benefit of theirbargain -- a lump-sum payment which preserves their Net EconomicReturn," Mr. Cohen insists.

NATIONAL ENERGY SERVICES: Files 10-Q For Period Ended July 31------------------------------------------------------------- National Energy Services Company, Inc., delivered its financialresults for the nine-months ended July 31, 2005, to the Securitiesand Exchange Commission on Sept. 28, 2005.

National Energy incurred a $293,016 net loss for the nine monthsended July 31, 2005 -- a 49% improvement over the $571,788 netloss recorded in the nine months ended July 31, 2004. The Companyhas incurred substantial losses for the fiscal years ended Oct.31, 2004 and 2003.

The Company's balance sheet showed $1,794,572 of assets atJuly 31, 2005, and liabilities totaling $2,382,797. Workingcapital deficit has increased by $82,910 since October 31, 2004.The deficit is now $328,648. National Energy has minimalliquidity and its working capital is severely strained, as it hasfully utilized its credit lines.

PPL Spectrum Agreement

Prior to the current fiscal year, PPL Spectrum, Inc., providedfinancing to National Energy's clients in connection with theCompany's Energy Gatekeeper Program. Under its arrangement withPPL, the Company executed notes payable to PPL for the amount ofthe financing, and took notes receivable from the client in likeamount.

In 2004 PPL Spectrum, Inc. terminated the arrangement under whichit had previously provided equipment financing to the Company'scustomers.

Effective March 1, 2005 the Company assigned to PPL all of thenotes receivable that arose from customer financing provided byPPL. In turn, PPL released the Company from the correspondingnotes payable to them.

Although the transaction had no material effect on the Company'snet worth, the Company's balance sheet was substantially modified:

National Energy's Management echoes that doubt as it talks aboutthe company's financial status at July 31, 2005.

About National Energy

Headquartered in Egg Harbor Township, N.J., National EnergyServices Company, Inc. -- http://www.nescorporation.com/-- provides energy-saving services exclusively to the long-term careindustry. The company offers activated air laundry systems thatare most effective in cold water, thereby lowering energy costs.The Company also installs energy-efficient lighting systems, whichreduce energy consumption while improving the quality of light ina facility. In addition to these and other energy-saving upgradesand improvements, the Company offers financing packagesspecifically designed for the long term care community.

NATIONAL R.V.: Files 2004 Annual Report with SEC------------------------------------------------National R.V. Holdings, Inc. (NYSE: NVH) completed its annualaudit for its 2004 fiscal year and has filed its Annual Report onForm 10-K for 2004 with the Securities and Exchange Commission.The Form 10-K filing reflects an unqualified opinion on theCompany's consolidated financial statements from its independentregistered public accountants and does not contain a going concernparagraph. The Company also filed its amended Form 10-Q for thethird quarter of 2004.

In April 2005, the Company disclosed that the filing of its AnnualReport would be delayed as it dealt with various accountingmatters in connection the audit of its 2004 fiscal year,including, as previously reported:

-- certain restatements of prior period financial statements;

-- the completion of its Sarbanes-Oxley Section 404 assessment of internal control over financial reporting; and

-- the required evaluation of its ability to continue as a going concern.

As previously reported, the independent registered publicaccountants' report contained an adverse opinion on theeffectiveness of the Company's internal controls over financialreporting as of Dec. 31, 2004. During the ensuing months, theCompany worked with its independent registered public accountantsto complete the audit and with its bankers to secure a new creditfacility.

"We are pleased to finally close the 2004 audit and file thisreport," stated Tom Martini, National R.V. Holdings' chieffinancial officer. "This has been a lengthy and challengingprocess, especially in light of the new requirements of Sarbanes-Oxley. With this filing behind us, we are now able to dedicateour resources to further implement our growth initiatives."

Executive Appointments

The Company has recently appointed Len Southwick president of itsNational RV division and has named John Draheim as a senior vicepresident of sales, marketing, and product planning anddevelopment of the division.

Mr. Southwick assumes the role of president of National RV fromBrad Albrechtsen who will continue in his role as CEO of NationalR.V. Holdings and who had been serving in a dual role as theCompany's CEO and also the president of National RV. Prior to hisappointment as president, Mr. Southwick held the title ofexecutive vice president, and has been with National RV in variouspositions for over two years. He started as vice president ofcustomer service, where he was successful in garnering improvementin National RV's Dealer Satisfaction Index scores. As hisresponsibilities expanded over the last year to include productdevelopment and engineering, and later manufacturing andmaterials, Mr. Southwick has been key in driving improvements inNational RV's manufacturing efficiencies. Prior to joiningNational RV, Mr. Southwick had over 20 years experience in theautomotive industry.

"With each additional area of responsibility, Len has provenhimself to be a tireless, enthusiastic, and capable leader. Weare confident that he will continue to add value to National RV inhis new role as president," commented Mr. Albrechtsen. "Fillingthis position enables me to focus more on strategic, investor,legal, and compliance issues while still working with the divisionpresidents to improve our operations."

Mr. Draheim's background includes ten years in the automotiveindustry, from 1988 to 1997, first with Volkswagen and then withKia. In 1997 he joined Fleetwood, where he held various positionsin both the motorhome and towable divisions, including regionalsales director, director of sales and product planning, andfinally vice president of the RV Group. He spent the last year atHoliday Rambler, a division of Monaco, where he served as thenational director of sales.

"We welcome John to National RV, and look forward to the expertisehe will bring to our sales and marketing efforts as well as to theproduct planning arena," stated Len Southwick, National RV'spresident.

National R.V. Holdings, Inc., through its two wholly ownedsubsidiaries, National RV, Inc., and Country Coach, Inc., is oneof the nation's leading producers of motorized recreationvehicles. NRV is located in Perris, California, where it producesClass A gas and diesel motor homes under model names Dolphin,Islander, Sea Breeze, Tradewinds and Tropi-Cal. CCI is located inJunction City, Oregon where it produces high-end Class A dieselmotor homes under the model names Affinity, Allure, Inspire,Intrigue, and Magna, and bus conversions under the Country CoachPrevost brand.

NEW HEIGHTS: Wants Entry of Final Decree Delayed to Nov. 21-----------------------------------------------------------New Heights Recovery & Power, LLC, asks the U.S. Bankruptcy Courtfor the District of Delaware to further extend the time to file afinal report and delay entry of a final decree formally closingits chapter 11 case until Nov. 21, 2005.

As reported in the Troubled Company Reporter on May 30, 2005, theCourt extended the deadline by which the Debtor must file a finalreport and delayed the entry of the automatic final decree untilSept. 21, 2005.

The Debtor reminds the Court that pursuant to Paragraph 11 of theSale Order, the Court will enter a form of order for a FinalDecree upon certification of counsel that post-closing mattershave been accomplished. The Debtor says the post-closing mattersinclude:

(a) submission of a final schedule itemizing the Final Distribution made pursuant to the Sale Order;

(b) handling of all unclaimed distributions pursuant to the Plan;

(c) payments of fees to the U.S. Trustee;

(d) consent of the U.S. Trustee to the entry of a Final Decree; and

(e) submission of a final report.

The Debtor tells the Court that although it has made the FinalDistribution pursuant to the Sale Order and Plan, it has notresolved the issues relating to New Jersey's claim. The Debtorsays that once the claim is resolved, it will have completed anyremaining tasks and file a final report.

Headquartered in Ford Heights, Illinois, New Heights Recovery &Power, LLC -- http://www.tires2power.com/-- is the owner and operator of the Tire Combustion Facility and other tire rubberprocessing facilities. The Company filed for chapter 11protection on April 29, 2004 (Bankr. Del. Case No. 04-11277).Eric Lopez Schnabel, Esq., at Klett Rooney Lieber & Schorlingrepresents the Debtor. When the Company filed for chapter 11protection, it listed both its estimated debts and assets of $50million. The Debtor first filed for bankruptcy in March 26, 1996,as a result to the amendment of the Retail Rate Law, and emergedin 1998.

NEXTMEDIA OPERATING: Soliciting Consents to Amend 10.75% Indenture------------------------------------------------------------------NextMedia Operating, Inc., commenced a tender offer and consentsolicitation for any and all of its $200 million outstandingprincipal amount 10.75% Senior Subordinated Notes due 2011.

The tender offer and the consent solicitation are being made uponthe terms and subject to the conditions set forth in the Offer toPurchase and Consent Solicitation Statement and related Consentand Letter of Transmittal, each dated Oct. 11, 2005.

The tender offer is scheduled to expire at 5:00 p.m., New YorkCity time, on Nov. 8, 2005, unless extended or earlier terminated.The total consideration for each $1,000 principal amount of Notesvalidly tendered and accepted for purchase will be fixed on thesecond business day immediately preceding the Consent Time.The Price Determination Date will be extended to the extent theConsent Time has been extended. However, once the PriceDetermination Date has been determined, it will not be extendedeven if the Consent Time is thereafter extended. The totalconsideration will be based on the present value on the expectedpayment date of the sum of $1,053.75 (the redemption price payablefor the Notes on their earliest redemption date) plus allscheduled interest payments on the Notes from the expected paymentdate through July 1, 2006 (the earliest date on which the Notesare redeemable at a fixed redemption price) discounted to presentvalue on the expected payment date, minus accrued and unpaidinterest to, but not including, the expected payment date.

The present value on the expected payment date will be determinedusing a discount rate equal to the yield to maturity of the 2.75%U.S. Treasury Note due June 30, 2006, on the Price DeterminationDate, plus a fixed spread of 50 basis points. The totalconsideration for each Note tendered includes a consent payment of$20.00 per $1,000 principal amount of Notes to holders who validlytender their Notes and deliver their consents prior to 5:00 p.m.,New York City time, on Oct. 25, 2005, unless such date isextended. Holders who tender their Notes after the Consent Timewill not receive the consent payment. Tendered Notes may not bewithdrawn and consents may not be revoked after the Consent Timeexcept as set forth in the Offer to Purchase and ConsentSolicitation Statement. Holders who properly tender their Notesalso will be paid accrued and unpaid interest up to, but notincluding, the payment date.

Consent Solicitation

The consents are being solicited to eliminate substantially all ofthe restrictive covenants (including, without limitation, thecovenants limiting the incurrence of debt, and the payment ofdividends on and the repurchase of NextMedia's capital stock),certain affirmative covenants and certain events of defaultcontained in the indenture governing the Notes. Holders may nottender their Notes without delivering consents or deliver consentswithout tendering their Notes.

The obligation of NextMedia to accept for purchase and pay for theNotes in the tender offer is conditioned on, among other things:

-- the completion by NextMedia of a new financing arrangement,

-- the availability of sufficient funds to purchase tendered Notes, and

-- the execution of a supplemental indenture implementing the Proposed Amendments following delivery of consents to the Proposed Amendments by holders of at least a majority of the aggregate principal amount of outstanding Notes, each as described in more detail in the Offer to Purchase and Consent Solicitation Statement.

NextMedia has retained Goldman, Sachs & Co. to serve as the dealermanager for the tender offer and the consent solicitation.Questions regarding the tender offer and the consent solicitationmay be directed to Goldman, Sachs & Co. at (877) 686-5059 or (212)357-7867. Requests for documents in connection with the tenderoffer and the consent solicitation may be directed to GlobalBondholder Services Corporation, the information agent, at (212)430-3774.

NextMedia Operating, Inc., is a diversified out-of-home mediacompany headquartered in Denver, Colorado. NextMedia, through itssubsidiaries and affiliates, owns and operates 58 stations in 14markets throughout the United States and more than 5,100 bulletinand poster displays. Additionally, NextMedia owns advertisingdisplays in more than 2,400 retail locations across the UnitedStates. Investors in NextMedia's ultimate parent entity,NextMedia Investors, LLC, include Thomas Weisel Capital Partners,Alta Communications, Weston Presidio Capital and Goldman SachsCapital Partners, as well as senior management. NextMedia wasfounded by veteran media executives Carl E. Hirsch, ExecutiveChairman, and Seven Dinetz, President and CEO.

* * *

As reported in the Troubled Company Reporter on July 26, 2005,Standard & Poor's Ratings Services lowered its ratings onNextMedia Operating Inc., including lowering the long-termcorporate credit rating to 'B' from 'B+', because of the increasein debt to EBITDA resulting from sizable debt-financedacquisitions. At the same time, Standard & Poor's revised itsoutlook on the Englewood, Colorado-based radio broadcaster tostable from negative. Pro forma for the recently announced $80million acquisition of two San Jos,, California, radio stationsfrom Infinity Radio, NextMedia had approximately $300 million indebt outstanding at March 31, 2005.

NORTHWEST AIRLINES: Equity Trading Restricted to Protect NOLs------------------------------------------------------------- The Northwest Airlines Corporation and its debtor-affilaliatesestimate that as of December 31, 2004, they had a consolidated NetOperating Loss carryforward of approximately $2.1 billion. Inaddition, the Debtors anticipate generating substantial additionalNOLs during 2005. Based on current projections, the Debtorsexpect to use a substantial portion of their NOL carryforwards tooffset future income and dramatically reduce their federal incometax liability, subject to certain limitations.

The Debtors' ability to use their NOL carryforwards is subject tocertain statutory limitations. Mr. Zirinsky relates that onelimitation is contained in Section 382 of the Internal RevenueCode, which, for a corporation that undergoes a change ofownership, limits that corporation's ability to use its NOLs andcertain other tax attributes to offset future income.

For purposes of Section 382, an ownership change occurs when thepercentage of a loss company's equity -- measured by value -- owned by one or more 5% shareholders increases by more than 50percentage points over the lowest percentage of stock owned bythose shareholders at any time during a three-year rollingtesting period. A Section 382 change of ownership beforeconfirmation of a plan would effectively eliminate the Debtors'ability to use their NOL carryforwards and certain other taxattributes.

Mr. Zirinsky notes that the limitations imposed by Section 382 inthe context of an ownership change pursuant to a confirmedChapter 11 plan are significantly more relaxed, particularlywhere the plan involves the retention or receipt of at least 50%of the stock of the reorganized Debtors by shareholders orQualified Creditors.

It is possible that any realistic plan of reorganization willinvolve the issuance of NWA Corp. common stock to creditors insatisfaction, either in whole or in part, of the Debtors'prepetition indebtedness. In that event, Mr. Zirinsky says, theDebtors may seek to avail themselves of the special reliefafforded by Section 382 for changes in ownership under aconfirmed Chapter 11 plan.

If the U.S. Bankruptcy Court for the Southern District of New Yorkdoes not grant their request, the Debtors could lose thesubstantial benefits of their NOL carryforwards before theiremergence from Chapter 11 as a result of continued trading andaccumulation of claims by creditors in claims against, and bystockholders in interests in, Northwest. Accordingly, consistentwith the automatic stay, the Debtors need the ability to monitorand possibly object to changes in the ownership of stock andclaims to assure that:

(i) a 50% change of ownership does not occur before the effective date of a Chapter 11 plan in their cases, and

(ii) for a change of ownership occurring under a Chapter 11 plan, the Debtors have the opportunity to avail themselves of the special relief provided by Section 382.

Accordingly, the Debtors seek the Court's authority to protectand preserve valuable "NOLs" in excess of $2.1 billion byestablishing notice and waiting periods to govern transfers ofequity interests in and claims against the Debtors and proceduresfor objecting to those transfers in certain circumstances.

If left unrestricted, Mr. Zirinsky says, trading could severelylimit the Debtors' ability to use valuable assets of theirestates, namely their NOLs, and could have significant negativeconsequences for the Debtors, their estates and thereorganization process.

Specifically, Mr. Zirinsky explains, trading of equity interestsin and claims against the Debtors' securities could adverselyaffect the Debtors' NOLs if:

(i) too many 5% or greater blocks of equity securities are created, or too many shares are added to or sold from such blocks, such that, together with previous trading by 5% shareholders during the preceding three year period, an ownership change within the meaning of Section 382 is triggered prior to consummation, and outside the context, of a confirmed Chapter 11 plan; or

(ii) the beneficial ownership4 of claims against the Debtors which are currently held by "qualified creditors"5 under the applicable tax regulations is transferred, prior to consummation of the plan, and those claims -- either alone or when accumulated with other claims currently held by nonqualified creditors -- would be converted under a plan of reorganization into a 5% or greater block of the stock of the reorganized Debtors.

Thus, to preserve to the fullest extent possible the flexibilityto craft a plan of reorganization, which maximizes the use oftheir NOL carryforwards, the Debtors seek limited relief thatwill enable them to closely monitor certain transfers of claimsand equity securities so as to be in a position to actexpeditiously to prevent those transfers if necessary to preservetheir NOL carryforwards. Mr. Zirinsky points out that byestablishing procedures for continuously monitoring claims-trading and equity-securities-trading, the Debtors can preservetheir ability to seek relief at the appropriate time if itappears that additional trading may jeopardize the use of theirNOL carryforwards.

Accordingly, the Debtors ask the Court to establish theseprocedures:

1. Procedure for Trading in Equity Securities

(a) Notice of Substantial Equityholder Status

Substantial Equityholders must file a notice with the Court of their status.

(b) Acquisition of Equity Securities

Before transferring equity securities that would increase the amount of NWA Corp. shares beneficially owned by a Substantial Equityholder or that would result in a person or entity becoming a Substantial Equityholder, that person, entity or Substantial Equityholder must file with the Court a Notice of Intent to Purchase, Acquire or Otherwise Accumulate an Equity Interest, describing the intended transaction.

(c) Disposition of Equity Securities

Before disposing of equity securities, Substantial Equityholders are also required to file with the Court a Notice of Intent to Sell, Trade or Otherwise Transfer an Equity Interest.

(d) Objection Procedures

The Debtors will have 30 days after actual receipt of an Equity Acquisition Notice or an Equity Disposition Notice to file an objection to the proposed transfer of equity securities on the grounds that the transfer may adversely affect their ability to utilize their NOLs or tax attributes as a result of an ownership change.

If the Debtors file a timely Objection, the Proposed Transaction will not be effective unless approved by a final and nonappealable Court order.

If the Debtors don't file a timely Objection or if they provide a written authorization, then the Proposed Transaction may proceed solely as described in the Notice.

(e) Definitions

A Substantial Equityholder is any person or entity that beneficially owns at least 3,750,000 shares -- representing approximately 4% of all issued and outstanding shares on a fully diluted basis -- of the stock of NWA Corp.

Beneficial ownership of equity securities will be determined in accordance with applicable rules under Section 382 of the Internal Revenue Code and, thus, will include direct and indirect ownership -- e.g., a holding company would be considered to beneficially own all shares owned or acquired by its subsidiaries -- ownership by the holder's family members and persons acting in concert with the holder to make a coordinated acquisition of stock, and ownership of shares which the holder has an option to acquire.

An "option" to acquire stock includes any contingent purchase, warrant, convertible debt, put, stock subject to risk of forfeiture, contract to acquire stock or similar interest, regardless of whether it is contingent or otherwise not currently exercisable.

2. Procedure for Trading in Claims

(a) Notice of Substantial Claimholder Status

Substantial Claimholders are required to file with the Court a notice of their status.

(b) Acquisition of Claims

Before buying claims, Substantial Claimholders are required to file with the Court a Notice of Intent to Purchase, Acquire or Otherwise Accumulate a Claim.

(c) Disposition of Claims

Before selling claims, Substantial Claimholders are required to file a Notice of Intent to Sell, Trade or Otherwise Dispose of a Claim.

(d) Objection Procedures

The Debtors will have 30 calendar days after receipt of a Claims Acquisition Notice or Claims Disposition Notice to file with the Court an objection to any proposed transfer of claims on the grounds that the transfer may adversely affect their ability to utilize their NOLs or tax attributes after an ownership change.

If the Debtors file a timely objection, the proposed transaction will not be effective unless approved by a final nonappealable Court order.

If the Debtors don't file a timely objection or if they provide written authorization, then the Proposed Transaction may proceed.

(e) Definitions

A Substantial Claimholder is any person or entity that beneficially owns:

(i) an aggregate principal amount of claims against the Debtors or any controlled entity through which a Substantial Claimholder beneficially owns an indirect interest in claims against the Debtors,

(ii) a lease or leases under which one or more of the Debtors are lessees and pursuant to which payments are or will become due, or

(iii) any combination of (i) and (ii),

in each case, equal to or exceeding $120,000,000.

Beneficial ownership of claims will be determined in accordance with applicable rules under Section 382 of the Internal Revenue Code and, thus, will include direct and indirect ownership -- e.g., a holding company would be considered to beneficially own all claims owned or acquired by its subsidiaries -- ownership by family members and any group of persons acting pursuant to a formal or informal understanding to make a coordinated acquisition of claims, and ownership of claims, which the holder has an option to acquire.

An option to acquire claims includes any contingent purchase, put, contract to acquire a claim(s) or similar interest, regardless of whether it is contingent or otherwise not currently exercisable.

3. Non-Compliance with the Trading Procedures

Any purchase, sale or other transfer of claims against, or equity securities in, the Debtors in violation of the procedures will be null and void and will confer no rights on the transferee.

* * *

The Court grants the Debtors' request on an interim basis. JudgeGropper rules that any purchase, sale or other transfer of claimsagainst, or equity securities in, the Debtors in violation of theprocedures will be null and void and will confer no rights on thetransferee.

Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit,Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, andapproximately 1,400 daily departures. Northwest is a member ofSkyTeam, an airline alliance that offers customers one of theworld's most extensive global networks. Northwest and its travelpartners serve more than 900 cities in excess of 160 countries onsix continents. The Company and 12 affiliates filed for chapter11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., atCadwalader, Wickersham & Taft LLP in New York, and Mark C.Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP inWashington represent the Debtors in their restructuringefforts. When the Debtors filed for protection from theircreditors, they listed $14.4 billion in total assets and $17.9billion in total debts. (Northwest Airlines Bankruptcy News,Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000)

* a relatively short track record of strong operating earnings since its IPO in 2001; and

* 81% ownership by lower-rated Fairfax Financial Holdings Ltd.

As the 18th-largest reinsurer in the world based on 2004reinsurance premiums, Odyssey Re continues to realize the benefitsof its opportunistic strategy as demonstrated by strong revenuegrowth in a favorable premium environment and much-improvedunderwriting results in the past four years. During this period,the group's business-mix diversification improved significantly,not only geographically, but also by line of business anddistribution source.

Although the current rating and outlook is partially tied to lowerrated Fairfax Financial Holdings Ltd. (FFH owns 81% of ORH), thepotential for a revision to a positive outlook exists if Odysseyis successful in posting strong operating performance in 2006 andif capital adequacy continues to improve well into the stronglevel following our ongoing assessment of reserve adequacy.Alternatively, if Odyssey is unsuccessful in meeting S&P'sexpectations or if FFH's financial strength was to materiallydiminish, Standard & Poor's will consider adverse ratings actions.

ON SEMICONDUCTOR: Settles $31.2 Million Claim for $2.5 Million-------------------------------------------------------------- ON Semiconductor Corp. entered into a settlement agreement withone of its customers (and that customer's customer), resolving apotential claim for costs the customers incurred in remedyingcertain alleged failures of products purchased directly orindirectly from the Company.

The potential claim was estimated by the customer to aggregateapproximately $31.2 million. Under the settlement agreement, ONSemiconductor agreed to pay its $2.5 million in cash and eachparty agreed to bear its own costs and expenses in connection withthe claim.

ON Semiconductor has not publicly disclosed the identity of itsComplaining Tier I and Tier II Customers. In its latest annualreport, ON Semiconductor says it has approximately 200 directcustomers worldwide and services approximately 320 significantoriginal equipment manufacturers indirectly through itsdistributor and electronic manufacturing service providercustomers. ON Semiconductor's direct and indirect customersinclude:

(1) leading original equipment manufacturers in a broad variety of industries, such as Intel, Motorola, Nokia, Philips, Siemens and Sony;

(2) electronic manufacturing service providers, such as Flextronics, Jabil and Solectron; and

As reported in the Troubled Company Reporter on June 7, 2005,Standard & Poor's Ratings Services raised its corporate creditrating for Phoenix, Arizona-based ON Semiconductor Corp. toB+/Stable/-- from B/Positive/--.

"The action recognizes the company's improved debt-protectionmeasures following a series of debt and equity refinancing actionsin the past several quarters, as well as expectations thatoperating profitability, cash flows, and liquidity will remainnear recent levels," said Standard & Poor's credit analyst BruceHyman. The ratings continue to reflect its still-limited debt-protection measures and the company's position as a supplier ofcommodity semiconductors in a challenging operating environment,and adequate operating liquidity.

OWENS CORNING: Says Asbestos Settlement with Murray is Valid------------------------------------------------------------In late 1998, Owens Corning and its debtor-affiliates commencedtheir National Settlement Program, which was designed to bettermanage the Debtors' asbestos liabilities and predict the timingand amount of payments for both pending and future claims.

J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,Delaware relates that under the NSP, the Debtors negotiated withprominent asbestos law firms to establish procedures and fixpayments for resolving present and future claims brought by thelaw firms without litigation for a projected period of at least10 years. In exchange for the firms resolving their clients'claims under the NSP, the Debtors became obligated to process theclaim information under administrative procedures and makesettlement payments to all qualifying plaintiffs.

Under the NSP, the firms were required to submit claim forms andsupporting evidence for each of their clients. The informationtypically included proof of product exposure, supporting medicalevidence and an executed release.

Under most agreements, the Debtors issued checks, either in alump sum settlement for a group of plaintiffs' claims orindividual checks for each particular plaintiff, to the lawfirms.

In certain cases, funds were distributed even though theplaintiffs had not satisfied some or all of the conditionsprecedent to the payments, Ms. Stickles notes. In someinstances, plaintiffs subsequently provided the requisitedocumentation after receiving payment.

When they filed for bankruptcy, Owens Corning and Fibreboard hadentered into NSP agreements with more than 100 law firms,including The Murray Law Firm, providing for the resolution ofover 400,000 pending asbestos-related personal injury claims.

The NSP resulted in the Debtors resolving claims forsubstantially less money than plaintiffs sought in the tortsystem, and the average settlement payment was less than theDebtors' settlements in the years prior for similar claims, Ms.Stickles points out. "The agreements also allowed the Debtors toresolve the majority of the cases then pending against them,without the uncertainty and inconsistency of the tort system, andwithout the significant litigation costs that would have beenincurred if the agreements had not been reached."

Commercial Committee's Allegations

However, the Official Committee of Unsecured Creditors allegedthat the Debtors:

-- incurred obligations and made transfers to the law firms since the NSP commenced, including certain One Year Payments and Four Year Payments pursuant to the NSP. The Debtors received less than fair consideration in exchange for certain One Year Payments and the Four Year Payments under the NSP;

-- incurred obligations and made transfers to the law firms with intent to hinder, delay, or defraud its other non- asbestos creditors;

-- generally received less than reasonably equivalent value in exchange for the transfers or obligations, and each was insolvent on the date each of that transfer was made or that obligation was incurred, or became insolvent as a result of that transfer or obligation;

-- who were insolvent at the time of, or was rendered insolvent by, the transfer made or obligation incurred, also received less than reasonably equivalent value in exchange for any of the transfer or obligation to the extent funds were disbursed to the law firms' clients even though the clients had not satisfied the conditions precedent to payment;

-- engaged in business or transactions, or were about to engage in business or transactions, for which any property remaining with them were unreasonably small capital, or they intended to incur, or believed that they would incur, debts that would be beyond their ability to pay as those debts matured; and

-- made those transfers or incurred those obligations at a time when each Debtor was insolvent, or became insolvent as a result of those transfers or obligations, or was engaged in business or transactions, or was about to engage in business or transactions, for which any property remaining with the Debtors was unreasonably small capital, or the Debtors intended to incur, or believed that they would incur, debts that would be beyond their ability to pay as those debts matured.

The Commercial Committee further contended that:

-- at the time the transfers or obligations were made or incurred, each of the Debtors was engaged or about to be engaged in a business or transaction for which their remaining assets were unreasonably small in relation to their business transactions;

-- the Debtors intended to incur or believed that it would incur debts beyond their ability to pay as the debts became due;

-- as of the Petition Date, one or more existing creditors of the Debtors were entitled to avoid the Four Year Payments under applicable state law; and

-- some or all of the One Year Payments and the Four Year Payments under the NSP Agreement are avoidable as fraudulent transfers or obligations under Sections 544 and 548 of the Bankruptcy Code and applicable state law, including the Uniform Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act.

Owens Corning's Stand

In contrast, the Debtors believe that the NSP payments made tothe law firms are not avoidable under Sections 544 or 548 and anyapplicable state law, whether under the UFTA or the UFCA.

To resolve the controversy created by the Commercial Committee'sallegations, Owens Corning, Fibreboard Corporation, Integrex, andtheir affiliated Debtors ask the U.S. Bankruptcy Court for theDistrict of Delaware to declare that:

(a) The NSP agreement with the law firms was a valid agreement enforceable in accordance with its terms, subject to applicable bankruptcy law, including Section 365; and

(b) The NSP payments made, to the extent disbursed to the firms' clients after the clients' satisfaction of the conditions precedent to payment, are not avoidable or recoverable as fraudulent transfers under Sections 544, 548 and 550 or any applicable state law.

In the alternative, to preserve any valid claim relating to theNSP payments for the benefit of creditors and their estates, theDebtors seek to avoid and recover from The Murray Law Firm and anunknown number of John Does:

-- NSP payments made to the law firms as attorneys' fees and costs; or

-- those portions of any NSP payment made to an individual asbestos claimant or group of asbestos claimants for payment to the law firms in compensation of attorney's fees and costs.

The Murray Law Firm represented asbestos personal injuryplaintiffs who entered into the NSP Agreement with the Debtors.The John Does are those persons who entered into the NSPAgreement, or are the agents, successors or assigns of, the non-debtor parties to the NSP Agreement.

Integrex, a debtor, was involved in the processing and payment ofasbestos-related claims on behalf of Owens Corning andFibreboard.

PHARMACEUTICAL FORMULATIONS: Taps Dovebid as Appraiser------------------------------------------------------Pharmaceutical Formulations, Inc., asks the U.S. Bankruptcy Courtfor the District of Delaware for authority to retain DovebidValuation Services, Inc., as its appraiser.

Dovebid Valuation's proposed appraisal of the Debtor's machineryand equipment is part of the terms of the settlement resolvingGeneral Electric Capital Corporation's limited objection to thesale of substantially all of the Debtor's assets to Leiner HealthProducts, LLC, for approximately $23 million.

General Electric holds a security interest in certain of theDebtor's machinery and equipment on account of a prepetitionpromissory note. General Electric has agreed to be paid out ofthe proceeds of the sale.

The Debtor selected Dovebid Valuation as appraiser based on theFirm's extensive experience and expertise in capital assetvaluation for large corporations.

Dovebid Valuation will:

a) conduct an appraisal of the Debtor's machinery and equipment located at 460 Plainfield Avenue, Edison, New Jersey;

b) provide written appraisal with a detailed listing of machinery and equipment and their corresponding value estimates, and that will conform with the Uniform Standards of Professional Appraisal Practice;

c) meet periodically meet with the Debtor's accountants and attorneys, regarding the status of its appraisal; and

d) if required, appear in court during the term of the retention to testify or to consult with the Debtor in connection with the valuation of the Debtor's property.

The Debtor has agreed to pay Dovebid Valuation an appraisal fee of$15,000 upon completion of the appraisal report. The Firm is alsoentitled to a reimbursement of any necessary expenses incurredduring the appraisal process.

To the best of the Debtor's knowledge, Dovebid Valuation is a"disinterested person" as that term is defined in section 101(14)of the Bankruptcy Code.

Headquartered in Foster City, California, DoveBid Valuation -- http://www.dovebid.com/-- is a global provider of capital asset auction and valuation services to large corporations and financialinstitutions. The Firm has over 65 years of auction experience inthe capital asset industry with more than 35 locations in 15countries.

Mr. Tirone assures the Debtors that McGuireWoods LLP isdisinterested as that term is defined in Section 101(14) of theU.S. Bankruptcy Code.

With 725 lawyers in 15 offices worldwide, McGuireWoods LLP -- http://www.mcguirewoods.com/-- is a full service law firm that serves public, private, government and nonprofit clients from manyindustries including automotive, energy resources, health care,technology and transportation.

Headquartered in Morristown, New Jersey, Ponderosa Pine Energy,LLC, and its affiliates are utility companies that supplyelectricity and steam. The Company and its debtor-affiliatesfiled for chapter 11 protection on April 14, 2005 (Bankr. D. N.J.Case No. 05-22068). Mary E. Seymour, Esq., Sharon L. Levine,Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler PCrepresent the Debtor in their restructuring efforts. When theDebtors filed for protection from their creditors, they listedestimated assets and debts of more than $100 million.

As a result of these influences, the company's profit margins havebeen suppressed, and so too has its cash flow as a proportion ofdebt. Since this circumstance is not expected to change over thenear term, the rating has been downgraded to a level morereflective of expected credit metrics. With the ratings revision,the outlook was restored to stable.

Ratings Downgraded:

* Corporate Family: to B2 from Ba3

* $75.0 million 8.375% senior unsecured debentures due June 1, 2013 to B3 from B1

* $60.0 million 8.375% senior unsecured notes due June 1, 2013 to B3 from B1

Outlook is stable.

As noted above, the rating action is prompted by a combination ofinfluences. Ongoing input cost pressure has increased unit costsfor all producers. It is not clear that this pressure will abate.Even as output prices potentially decline, it seems unlikely thatcosts for energy and chemicals will decrease substantially for theforeseeable future. Should input costs prove to be permanentlyelevated, pressure on margins will persist.

Secondly, the Canadian dollar continues its appreciation causingPope & Talbot's US dollar denominated costs to escalate andmargins to remain depressed. Also, the company's performancecontinues to suffer from the impact of softwood lumber duties.The company experienced negative Free Cash Flow in each of 2001,2002 and 2003 before a modest recovery was observed in 2004. Atthis juncture, Moody's anticipates significant negative FCF for2005, both on an operational basis and after considering theimpact of the Fort St. James sawmill acquisition. While softwoodpulp and lumber prices have increased from cyclical lows in thepast several quarters, the pulp market is encountering softnessand the lumber market may be vulnerable to a near term retreatfrom recent highs. There is therefore strong potential of nearterm revenues declining from levels observed in recent quarters.

Lastly, on April 25, 2005, Pope & Talbot announced the completionof its' acquisition of the Fort St. James, British Columbia,sawmill from Canfor Corporation for $37 million. With debtincreasing by approximately 15% while annualized cash flowincreases by a smaller proportion, leverage to cash flowincreases. This combination of circumstances generated financialmetrics that are much worse than those that are representative ofthe prior Ba3 rating. Using average annualized cash flow figuresfor the past three-and-a-half years and the June 30, 2005 debtfigure, Moody's observed RCF/Debt of 3.1% and (RCF-Capex)/Debt of-3.5%.

Despite management's actions to improve performance and financialmetrics, near term results are not expected to be dramaticallydifferent from those observed over the recent past. They arehowever, expected to gradually improve to levels commensurate witha B2 rating (RCF/Debt of 5.0% and (RCF-Capex)/Debt of 2.0%.), andaccordingly, Moody's downgraded Pope & Talbot's corporate familyrating to B2. With Pope & Talbot's bank credit facility andcertain capital lease obligations benefiting from securitypositions, the rating on the company's senior unsecured notes isnotched down from the B2 corporate family rating to B3.

Pope & Talbot's liquidity arrangements are adequate for its needs.Liquidity is provided from four sources:

a) A C$80.0 million Canadian revolving bank line (approximately US$65 million);

b) A C$100.0 million Canadian revolving line of credit (approximately US$81 million);

c) a US$35 million revolving facility that matures in March of 2007; and

d) A US$35 million off-balance sheet evergreen Accounts Receivable securitization program (generally fully utilized and does not feature any ratings triggers).

When financial covenants are accounted for, Moody's estimates thecompany had approximately US$73 million of available liquidityunder the revolving credit facilities at June 30th. The C$180million line of credit consists of two extendable revolving creditfacilities that mature on July 29, 2006 (renewed in July 2005).Drawings are convertible into term loans if the revolving periodsare not extended. The lines are secured by the Company's Canadianpulp mill land, the Fort St. James sawmill, equipment and certaininventory and accounts receivable.

Financial covenants include a maximum leverage ratio of 62.5% thatis tested at year-end, a net worth test ($139.7 million versus$139.55 million threshold at June 30th), and a minimum fixedcharge coverage ratio (1.60x at June 30th versus threshold of1.05x). While the company was marginally in compliance withcovenants for its respective credit facilities, management hasacknowledged the possibility of covenants breaches if they are notrenegotiated. Moody's anticipates that remedial action isongoing.

At the B2 corporate family rating level, the outlook is stable.This is predicated on the assumption that the company will takethe necessary steps to improve its performance and address bankcredit facility covenant compliance issues.

Over time, ratings and outlook upgrades are not expected unlessPope & Talbot engages in material debt reduction. Lower ratingscould result from any number of factors that would retard thecompany's ability to close the gap between the above-notedfinancial metrics appropriate for the rating versus those thathave been observed over the recent past. This would include:

* weakness in commodity prices; * further cost increases or Canadian dollar appreciation; and * further debt-financed acquisition activity.

A material deterioration in the company's liquidity arrangements,including the failure to renegotiate the covenants on a timelybasis, would also result in a ratings' action.

Pope & Talbot, Inc. is headquartered in Portland, Oregon, andproduces pulp and wood products with manufacturing facilities inthe north western United States and western Canada.

PREFERREDPLUS TRUST: S&P Lowers $31 Million Certs.' Rating to BB+-----------------------------------------------------------------Standard & Poor's Ratings Services lowered its rating on the$31,200,000 corporate bond-backed certificates issued byPreferredPLUS Trust Series CTR-1 to 'BB+' from 'BBB-' and removedit from CreditWatch, where it was placed with negativeimplications on September 8, 2005.

* its subsequent removal from CreditWatch negative on October 5, 2005.

PreferredPLUS Trust Series CTR-1 is a swap-independent synthetictransaction that is weak-linked to the underlying collateral, the$31,200,000 Cooper Tire & Rubber Co. 8.00% notes.

READ-RITE CORP: Wants Five Licensing Agreements Rejected--------------------------------------------------------Tevis T. Thompson, Jr., the Chapter 7 Trustee appointed in Read-Rite Corp.'s bankruptcy case, asks the Honorable Randall J.Newsome of the U.S. Bankruptcy Court for the Northern District ofCalifornia for authority to reject all executory contracts withComputer Associates International, Inc., and its allegedaffiliates, nunc pro tunc to May 4, 2004.

The Chapter 7 Trustee sold substantially all of Read-Ritesassets to Western Digital (Fremont), Inc., for $87 million onJuly 25, 2003.

On March 4, 2004, the Chapter 7 Trustee filed a motion to assumesome software licensing agreements with Computer Associates,International, Inc., Sterling Software Company, Ask ComputerSystems, Inc., and Cheyenne Software, Inc. The Chapter 7 Trusteealso filed a motion to reject a licensing agreement with PlatinumTechnology, Inc. The rejection was approved as of March 4, 2004.

Computer Associates objected to the assumption of the fourlicensing agreements on Apr. 2, 2004. Computer Associates allegesthat it is the successor licensor of Sterling, Ask, Cheyenne, andPlatinum's software products.

Western Digital and the Chapter 7 Trustee asked ComputerAssociates to provide copies of the license agreements with thefour companies. Computer Associates wasn't able to produce any ofthose agreements.

Western Digital and the Chapter 7 Trustee have also asked ComputerAssociates to provide documentation supporting its contention thatit was the successor licensor under the agreements with Sterling,Platinum, Ask, and Cheyenne. Computer Associates hasn't.

Western Digital determined that it was not using and did not needor want any of the five companies' software. Western Digitaladvised the Chapter 7 Trustee and Computer Associates and theparties agreed that the Agreements will be rejected.

Headquartered in Duluth, Georgia, Risk Management Alternatives,Inc. -- http://www.rmainc.net/-- provides consumer and commercial debt collections, accounts receivable management, call centeroperations, and other back-office support to firms in thefinancial services, telecommunications, utilities, and healthcaresectors, as well as government entities. The Company and tenaffiliates filed for chapter 11 protection on July 7, 2005 (Bankr.N.D. Ohio Case Nos. 05-43959 through 05-43969). Shawn M. Riley,Esq., at McDonald, Hopkins, Burke & Haber Co., LPA, represents theDebtors in their chapter 11 proceedings. When the Debtors filedfor protection from their creditors, they estimated more than $100million in assets and between $50 million to $100 million indebts.

The company reported the promotions of Mark Panzer to SeniorExecutive Vice President and Chief Marketing Officer and Mark deBruin to Executive Vice President, Pharmacy. Both will report toMr. Mastrian. All three promotions are effective immediately.

"Combining all the functions that directly impact theprofitability of our stores under Jim Mastrian's proven leadershipwill better position us to grow our business and improve ourperformance, especially in pharmacy," said Mary Sammons, Rite AidPresident and CEO.

In his new position, Mr. Mastrian, 63, formerly Senior ExecutiveVice President, Marketing, Logistics and Pharmacy Services, willhave overall responsibility for all store operations, categorymanagement, marketing, merchandising, supply chain, pharmacyservices and the company's new pharmacy benefit managementcompany. He will continue to report to Sammons.

Mr. Mastrian, a pharmacist with 40 years of experience in theretail drugstore industry, joined Rite Aid in 1998 as ExecutiveVice President of Category Management and was promoted toExecutive Vice President of Marketing in 1999 and to SeniorExecutive Vice President in 2000. Prior to Rite Aid, Mr. Mastrianwas Senior Executive Vice President of Merchandising and Marketingfor Office Max. From 1990 to 1997 he held positions of increasingresponsibility with Revco D.S., a chain of retail drugstores basedin the Midwest, rising to Executive Vice President of Marketing.He also held senior management positions at Gray Drug Fair Storesand People's Drug Stores, Inc.

In his new position, Mr. Panzer, 48, formerly Senior ExecutiveVice President, Store Operations, will oversee categorymanagement, marketing, merchandising and supply chain. A veteranof the retail drugstore industry, he joined Rite Aid in 2001 asExecutive Vice President, Store Operations and was promoted thefollowing year to Senior Executive Vice President. Prior tojoining Rite Aid, he served as a corporate vice president ofmarketing and sales at Albertson's grocery chain, where hedeveloped marketing and merchandising programs for 2,600 stores in37 states. Mr. Panzer began his career in 1972 with Osco Drug,Inc., a division of Jewel Companies acquired by American Storesand later merged with Albertson's. He held a variety ofoperations and marketing positions of increasing responsibilityboth at Osco and American Stores.

"Mark's unique combination of operational and marketing expertisewill be a major asset in his new role as he continues to developprograms designed to increase transactions, attract new customersand improve the Rite Aid shopping experience," Mr. Sammons said.

In his new position, Mark de Bruin, 46, formerly Senior VicePresident, Pharmacy Services, will oversee pharmacy operations,managed care, clinical services, pharmacy purchasing, governmentaffairs and the company's new pharmacy benefit management company.Mr. De Bruin, who started his career as a pharmacist for AmericanDrug Stores, joined Rite Aid in 2003 after serving as VicePresident, Managed Care and Pharmacy Procurement for Albertson's,Inc. From 1994 to 1999 he worked for RxAMERICA, Inc., a pharmacybenefit management company, rising to General Manager, and hasserved in a variety of managed health care positions for AmericanDrug Stores and Vons supermarket chain. He is a member of theU.S. Department's Health and Human Services Medicaid Commissionand serves as chairman of the policy council for the NationalAssociation of Chain Drug Stores.

"Mark has repeatedly demonstrated his knowledge and expertise inall aspects of the pharmacy business, both at Rite Aid and as aleader in the retail drugstore industry," Mr. Sammons said."Giving him responsibility for the many functions that directlyaffect pharmacy, including pharmacy operations, puts an evenstronger focus on that critical part of our business."

Rite Aid Corporation is one of the nation's leading drugstorechains with annual revenues of $16.8 billion and approximately3,350 stores in 28 states and the District of Columbia.

* * *

As reported in the Troubled Company Reporter on Sept. 1, 2005,Moody's Investors Service lowered the Speculative Grade LiquidityRating of Rite Aid Corporation to SGL-3 from SGL-2, affirmed alllong-term debt ratings (Corporate Family Rating of B2), andrevised the rating outlook to negative from stable. The downgradeof the Speculative Grade Liquidity Rating reflects Moody'sexpectation that mediocre operating cash flow and planned capitalinvestment increases over the next twelve months will require thecompany to rely on external financing sources to cover the cashflow deficit.

While liquidity over the next twelve months is adequate, revisionof the outlook to negative on Rite Aid's long-term debt ratingsreflects Moody's concern that operating results have stabilized ata level insufficient to fully fund fixed charges such as debtservice, cash preferred stock dividends, and capital investment,as well as the company's weak operating performance relative tohigher rated peers.

ROUNDY'S SUPERMARKETS: S&P Junks Proposed $325 Million Notes------------------------------------------------------------Standard & Poor's Ratings Services lowered its corporate creditrating on Milwaukee, Wisconsin-based Roundy's Supermarkets Inc. to'B' from 'BB-' and removed it from CreditWatch, where it wasplaced with negative implications on September 28, 2005. Theoutlook is stable.

At the same time, Standard & Poor's assigned a 'CCC+' rating tothe company's proposed $175 million floating-rate notes due 2012and $150 million senior subordinated notes due 2013.

These notes will be issued under rule 144A with futureregistration rights. At the same time, the proposed $825 millionbank facility was assigned a 'B' rating with a recovery rating of'3', indicating a meaningful (50%-80%) recovery of principal.Proceeds from this refinancing will be used to pay a $550 milliondividend, refinance existing debt, and cover fees and expenses.

Pro forma for the refinancing and dividend payout, Roundy's totaldebt will increase 80% to $1 billion, from $601 million at the endof 2004.

While recognizing the company's good market position andrelatively stable retail historical operating performance, therating change primarily reflects the material deterioration incredit protection measures. The proposed transaction would resultin 2005 pro forma last 12 monthslease-adjusted debt to EBITDA of6.8x as of July 2, 2005, compared with 4.7x at the end of 2004.EBITDA interest coverage is anticipated to deteriorate to the low2x area from 3.1x in 2004.

While credit metrics are currently weak for ratings, Standard &Poor's anticipates that they will improve to levels moreappropriate for the rating by 2007. Furthermore, Roundy'sstronger business profile and adequate liquidity levels providesupport for the rating and would partially offset a weakerfinancial profile.

RUFUS INC: Committee Hires Weiser LLP as Financial Advisor----------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware gave theOfficial Committee of Unsecured Creditors of Rufus, Inc.,permission to employ Weiser, LLP, as its financial advisor, nuncpro tunc to Aug., 24, 2005.

The Committee selected Weiser as financial advisor because of theFirm's substantial experience in accounting and financialconsulting, including turnarounds and bankruptcy.

Weiser will:

a) review all financial information prepared by the Debtor or its consultants, including a review of the Debtor's financial statements as of the filing of the petition;

n) provide other financial advisory services with respect to the Debtor, including valuation, general restructuring and advice with respect to financial, business and economic issues, as requested by the Committee.

To the Best of the Committees' knowledge, Weiser does not hold anyinterest adverse to the Debtor or its estate and is a"disinterested person" as that term is defined in Section 101(14)of the Bankruptcy Code.

Weiser, LLP, -- http://www.mrweiser.com/-- has provided accounting and consulting services to business enterprises andhigh net-worth individuals for nearly a century. The Firm hasoffices in New York City, Long Island, Westchester, Edison and NewJersey and maintains a staff of approximately 400 professionals.Weiser ranks as one of the top 10 accounting firms in the New Yorkmetropolitan area and top 20 nationally.

Headquartered in Meriden, Connecticut, Rufus, Inc., sells dogs,dog food, supplies and accessories. The Debtor also operates achain of six retail stores in the Northeastern United States. TheCompany filed for chapter 11 protection on Aug. 10, 2005 (Bankr.D. Del. Case No. 05-12218). Edward J. Kosmowski, Esq., and Ian S.Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP,represent the Debtor in its bankruptcy proceeding. When theDebtor filed for protection from its creditors, it listed$1.8 million in total assets and $12.7 million in total debts.

RUFUS INC: Has Until Feb. 6 to Decide on Leases----------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for theDistrict of Delaware extended, until Feb. 6, 2006, the time withinwhich Rufus, Inc., can elect to assume, assume and assign orreject six unexpired leases of non-residential real property.

The Debtor operates its remaining pet stores on the six locationssubject to the unexpired leases. The unexpired leases, the Debtorsays, are an integral component of its efforts to maximize thevalue of its estate through a sale of substantially all of itsassets.

The Debtor assures the Bankruptcy Court that the extension willnot prejudice its lessors and that it will continue to perform itsobligations under the leases.

Headquartered in Meriden, Connecticut, Rufus, Inc., sells dogs,dog food, supplies and accessories. The Debtor also operates achain of six retail stores in the Northeastern United States. TheCompany filed for chapter 11 protection on Aug. 10, 2005 (Bankr.D. Del. Case No. 05-12218). Edward J. Kosmowski, Esq., and Ian S.Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP,represent the Debtor in its bankruptcy proceeding. When theDebtor filed for protection from its creditors, it listed$1.8 million in total assets and $12.7 million in total debts.

In its Form 10-KSB for the fiscal year ended June 30, 2005,submitted to the Securities and Exchange Commission, Seamlessreports a $3,914,199 net loss in fiscal 2005 compared to a$5,175,480 net loss in fiscal 2004. The loss narrowed, Seamlesssays, because 2004's results reflected a sizeable write down ofassets.

The Company is currently in default on a note payable totaling$620,054 to Professional Plaza LLC. The note payable bearsinterest at prime plus 4% and is due May 14, 2006. The note issecured by the Company's series A convertible preferred stock.Because of the default status, noteholders now have the option toconvert the preferred stock to common stock.

Based in Las Vegas, Nevada, Internet Business International Inc.,nka Seamless Wi-Fi, provides wireless communications products andservices. The company, through Seamless Peer 2 Peer, developsPhenom Encryption Software, which enables secure communicationsover Wi-Fi, local area networks, and wide area networks with itsvirtual Internet extranet network technology. Seamless, throughSeamless Skyy-Fi, Inc., provides wireless data, voice, and videocommunication primarily for hotels, restaurants, coffee houses,and cafes. The company was formerly known as Internet Business'sInternational, Inc. and changed its name to Alpha WirelessBroadband, Inc. in September 2004; and then to Seamless Wi-Fi,Inc. in June 2005.

SPIKES ENTERPRISES: BofA Wants Stay Lifted to Foreclose on Assets-----------------------------------------------------------------Bank of America, N.A., the successor-in-interest to NationsBank ofGeorgia, N.A., asks the U.S. Bankruptcy Court for the NorthernDistrict of Georgia, Newnan Division, to lift the automatic stayin Spikes Enterprises, Inc.'s chapter 11 case so it can conduct aforeclosure sale of its collateral. The foreclosure, advertisedon June 7, was stayed by the bankruptcy filing.

In the alternative, BofA wants adequate protection from the Debtoror wants Spike's chapter 11 case converted to a chapter 7liquidation.

The Debtor executed a Promissory Note dated May 10, 1994, in favorof NationsBank of Georgia, for $1,206,000. NationsBank held thedeed of the Debtor's real property in Peachtree, Georgia, assecurity for the debt.

The Bank notes that the Debtor's case has been pending for morethan two months. It appears to the Bank that the Debtor doesn'thave a reasonable possibility of having a plan confirmed in areasonable time.

Among the variety of reasons presented to support its request, theBank is most concerned about the lack of insurance coverage forthe property. The Bank believes that the absence of insuranceputs its interest at risk. Against this backdrop, the Bank urgesthe Court to grant any one of its requests.

Headquartered in Fayetteville, Georgia, Spikes Enterprises is aKentucky Fried Chicken franchisee. The Company filed for chapter11 protection on June 6, 2005 (Bankr. N.D. Ga. Case No. 05-17180).Paul Reece Marr, Esq., represents the Debtor in its restructuringefforts. When the Debtor filed for protection from its creditors,it estimated assets between $1 million to $10 million andestimated debts between $500,000 to $1 million.

The preliminary bank debt and recovery ratings are subject toreview of final documentation. The outlook is stable. Theproceeds will be used to help fund Targa's acquisition of DynegyInc.'s midstream business, which was purchased for $2.3 billion.

"The ratings on Targa reflect the expected integration of Dynegy'smidstream operations and the firm's weak business and aggressivefinancial profile," said Standard & Poor's credit analyst JohnKennedy.

The stable outlook on Targa relies on:

* the successful integration of the Dynegy assets and continued efforts to manage the unpredictable natural gas gathering and processing cash flows;

* the successful management of the substantially larger operations; and

TECHNEGLAS INC: Selling Columbus Facility to TG707 for $1.95 Mil.-----------------------------------------------------------------Techneglas, Inc., asks the U.S. Bankruptcy Court for the SouthernDistrict of Ohio, Eastern Division, for authority to sell its realproperty located in Columbus, Ohio, to TG707, Inc.

The Columbus facility consists of 48 acres of land housingapproximately one million square feet of:

The Debtor tells the Court it currently spends $150,000 per monthto maintain the Columbus facility.

The Debtor estimates that the overall proceeds of the saletransaction will exceed $6 million, consisting of:

* a $1.95 million cash payment on the sale closing;

* issuance of $50,000 worth of stock from TG707; and

* TG707's assumption of all environmental liabilities associated with the plan, approximately $2.5 million.

The Debtor's First Amended Joint Plan of Reorganization wasconfirmed on Friday, Oct. 7, 2005. Under the Plan, the Columbusfacility won't be necessary in the Debtor's business. As such,the Debtor wants to maximize the facility's value and minimize theestate's administrative costs by selling the facility to TG707,subject to the Court's approval.

All creditors are invited, but not required, to attend. ThisMeeting of Creditors offers the one opportunity in a bankruptcyproceeding for creditors to question a responsible office of theDebtor under oath about the company's financial affairs andoperations that would be of interest to the general body ofcreditors.

Headquartered in Tempe, Arizona, Three-Five Systems, Inc. -- http://tfsc.com/-- provides specialized electronics manufacturing services to original equipment manufacturers. TFS offers a broadrange of engineering and manufacturing capabilities. The Companyfiled for chapter 11 protection on Sept. 8, 2005 (Bankr. D. Ariz.Case No. 05-17104). Thomas J. Salerno, Esq., at Squire, Sander &Dempsey, LLP, represents the Debtor in its restructuring efforts.When the Debtor filed for protection from its creditors, it listed$11,694,467 in total assets and $2,880,377 in total debts.

THREE-FIVE: Files Schedules of Assets and Liabilities in Arizona----------------------------------------------------------------Three-Five Systems, Inc., delivered its Schedules of Assets andLiabilities to the U.S. Bankruptcy Court for the District ofArizona, disclosing:

THREE-FIVE SYSTEMS: Wants Baker & McKenzie as Special Counsel-------------------------------------------------------------Three-Five Systems, Inc., asks the U.S. Bankruptcy Court for theDistrict of Arizona for permission to employ Baker & McKenzie asits special counsel.

Penang Sale Transaction

The Debtor tells the Court that the Penang Sale Transaction arisesout of the Debtor's decision to sell its Malaysian subsidiary,Three-Five Systems Electronic Manufacturing Services Sdn Bhd,through a proposed stock sale transaction. The Debtors say thatnegotiations with potential buyers are ongoing and a draft stockpurchase and sale agreement has already been prepared.

Baker & McKenzie will:

(a) negotiate and complete a stock purchase agreement for the sale of all the Debtor's stock in its Malaysian subsidiary to a willing buyer;

(b) perform all necessary closing matters related to the Penang Sale Transaction, which includes obtaining all necessary regulatory approvals in Malaysia to complete the transaction; and

(c) provide all other related advice to the Debtor and its representatives in connection with the Penang Sale Transaction.

Philippines Sale Transaction

The Debtor tells the Court that the Philippines Sale Transactionarises out of the Debtor's decision to sell its and Three-FiveSystems Pacific, Inc.'s assets and operations located in thePhilippines through an agreement executed on June 3, 2005.

Baker & McKenzie will:

(a) perform all post-closing matters necessary to complete the transaction, including the transfer of contracts;

(b) cancel PEZA tax registration in the Philippines; and

(c) close the Philippine business and any remaining Philippine operations.

Vitelcom Litigation

The Debtor tells the Court that the Vitelcom Litigation arises outof Vitelcom Mobile Technology, S.A.'s failure to pay the Debtorfor certain products the Debtor sold Vitelcom. The Debtor saysthat Baker & McKenzie will act as its special litigation counselin connection with the $1,431,146 claim against Vitelcom and itsrepresentative, Rogelio de Lorenzo Serrano, pending before theSpanish Court of First Instance No. 15 Malaga (Case No. 373/05).

Baker & McKenzie will:

(a) advise the Debtor on legal strategies in the prosecution and resolution of the Vitelcom Litigation;

(b) implement those strategies in the prosecution and resolution of the Vitelcom Litigation;

(c) prosecute the initial claim in any trial or hearing, and prosecute or defend any appeal or subsequent proceedings;

(d) gather and present all necessary evidence to prosecute the initial claim in any trial or hearing;

(e) defend the Debtor against Vitelcom's attempts to avoid its payment obligations to Debtor; and

(f) provide all other necessary litigation services in the Vitelcom Litigation.

TITAN CRUISE: Wants Court to Amend DIP Order & Needs More Money--------------------------------------------------------------- Titan Cruise Lines and its debtor-affiliate ask the U.S.Bankruptcy Court for the Middle District of Florida to enter anamended DIP Financing Order that authorizes the Debtors to obtainadditional post-petition loans.

The Debtors remind the Court that it the DIP Financing Orderentered Sept. 15, 2005, permit them to obtain up to $850,000 inpost-petition working capital line of credit from First AmericanBank.

Since the entry of the DIP Financing Order, the Debtors haveexperienced an unanticipated loss of days in operation as a resultof extreme weather conditions and because of that, they have notmet budgeted revenue goals necessary to become self-sustaining inthe near term. To continue their efforts to reorganize, theDebtors need additional operating funds from First American on anemergency basis.

First American has agreed to loan an additional $300,000 of post-petition loans to the Debtors on the same terms and conditions asthe Court's DIP Financing Order.

The Court held a hearing on Oct. 7, 2005, to consider the Debtors'request, but Bankruptcy Court records show that it has yet toenter an order approving the Debtors' request.

Headquartered in Saint Petersburg, Florida, Titan Cruise Lines andits subsidiary owns and operates an offshore casino gamingoperation. The Company and its subsidiary filed for chapter 11protection on August 1, 2005 (Bankr. M.D. Fla. Case Nos. 05-15154and 05-15188). Gregory M. McCoskey, Esq., at Glenn Rasmussen &Fogarty, P.A., represents the Debtors in their restructuringefforts. When the Debtors filed for protection from theircreditors, they estimated assets and debts between $10 million to$50 million.

TRISTAR HOTELS: List of 20 Largest Unsecured Creditors------------------------------------------------------Tristar Hotels & Investments, LLC, released a list of its 20Largest Unsecured Creditors:

Headquartered in Mountain View, California, Tristar Hotels andInvestments, LLC, filed for chapter 11 protection on Sept. 13,2005 (Bankr. N.D. Calif. Case No. 05-55789). Steven J. Sibley,Esq., at the Law Offices of DiNapoli and Sibley represents theDebtor in its restructuring efforts. When the Debtor filed forprotection from its creditors, it listed estimated assets anddebts of $10 million to $50 million.

TXU CORP: Paying TXU Europe $220 Million Today to Settle Claims---------------------------------------------------------------TXU Corp. will pay TXU Europe Ltd. $220 million today, Oct. 13,2005, to be distributed to creditors. The payment is pursuant toa settlement agreement the Company previously inked with TXUEurope.

The Company signed a comprehensive settlement agreement, earlythis year, resolving potential claims relating to TXU Europe Ltd.and its affiliates and major creditor groups.

As of Oct. 4, 2005, all of the conditions giving rise to theobligations of the Company under the Europe Agreement have beensatisfied, allowing the Company to release the payment today.

The payment will be sourced from cash from operations, which willbe subsequently offset by any insurance proceeds the Company isable to collect from its insurance carriers. The Company has notyet received any commitments from its insurance carriers.

TXU Corp. -- http://www.txucorp.com/-- a Dallas-based energy company, manages a portfolio of competitive and regulated energybusinesses in North America, primarily in Texas. In TXU Corp.'sunregulated business, TXU Energy provides electricity and relatedservices to 2.5 million competitive electricity customers inTexas, more customers than any other retail electric provider inthe state. TXU Power has over 18,300 megawatts of generation inTexas, including 2,300 MW of nuclear and 5,837 MW of lignite/coal-fired generation capacity. The company is also one of the largestpurchasers of wind-generated electricity in Texas and NorthAmerica. TXU Corp.'s regulated electric distribution andtransmission business, TXU Electric Delivery, complements thecompetitive operations, using asset management skills developedover more than one hundred years, to provide reliable electricitydelivery to consumers. TXU Electric Delivery operates the largestdistribution and transmission system in Texas, providing power tomore than 2.9 million electric delivery points over more than99,000 miles of distribution and 14,000 miles of transmissionlines.

* * *

As reported in the Troubled Company Reporter on Feb. 1, 2005,TXU Corp. securities rated by Fitch Ratings remain unchangedfollowing the announcement that TXU reached a comprehensivesettlement agreement resolving potential claims relating to TXUEurope. The ratings are:

UAL CORP: Wells Fargo Wants Bankruptcy Court to Reconsider Order----------------------------------------------------------------As previously reported in the Troubled Company Reporter, the U.S.Bankruptcy Court for the Northern District of Illinois enforcedthe Interim Adequate Protection Stipulation entered into in March2003, and approved by the Court on April 16, 2003. The basicpurpose was to provide Wells Fargo Bank, as Class A Pass ThroughTrustee and Subordination Agent for Series 1997-1 EETC, withadequate protection payments, while discussions were ongoingbetween itself and the Debtors to renegotiate the 1997-1 EETC.

Ann Acker, Esq., at Chapman and Cutler, in Chicago, Illinois,tells Judge Wedoff that the ETNs were specifically structured tobe bankruptcy remote, meaning the Debtors' bankruptcy would notadversely affect the Trust. Structured financings are based onone principle -- a defined group of assets can be structurallyisolated and serve as the basis of a financing that isindependent from the bankruptcy risks of the former owner of theassets. The focal point of a structured finance transaction isthe separation of the assets serving as collateral for thetransaction from the credit risk of another entity. Theseparation benefits the issuer by reducing the return required byinvestors through a reduction in the credit risk and, hence, theinterest rate.

"The primary theme of these transactions is bankruptcyremoteness," explains Ms. Acker. Great care is taken to ensurethat the transaction eliminates bankruptcy risk. Holders ofcertificates have an interest in the Trust, not in the propertyheld by the Trust. A determination that a bankrupt certificateholder could adversely affect the mechanics of a trust, includingthe exercise of remedies, would have a detrimental effect on manystructured finance transactions.

Therefore, the Debtors' argument that the security holdersviolated the automatic stay is unsupportable. Under Section 362of the Bankruptcy Code, a party can only violate the automaticstay by taking unauthorized action against property of a debtor'sbankruptcy estate. The only property transferred was theEquipment Notes, which are not owned by the Debtors, but ratherevidence and collateralize debts owed by the Debtors. TheEquipment Notes are held in the name of a Subordination Agent andbeneficially held by separate trusts. Therefore, Ms. Acker saysthat the automatic stay does not apply to the transfer of theunderlying Equipment Notes. The Debtor's motion to void thetransfer because the automatic stay is applicable must be denied.

UAL CORP: Court Sets Dec. 30 as Pension Plan Termination Date------------------------------------------------------------- The Pension Benefit Guaranty Corporation's request with respectto the termination of the United Airlines Pilot Defined BenefitPension Plan is denied, the Hon. Eugene Wedoff of the U.S.Bankruptcy Court for the Northern District of Illinois rules.

The PBGC's request with respect to the establishment of atermination date is granted. Judge Wedoff sets Dec. 30,2005, as the termination date of the Pilot Plan, should the courtdetermine that the Pilot Plan must be terminated.

If a pension plan has less assets than liabilities, thedifference equals the unfunded benefit liabilities, explains Ms.Neville. Benefit liabilities are calculated by determining thepresent value of all pension payments due over the life of theplan. This calculation requires numerous assumptions about thefuture. The choice of assumptions affects the amount of thebenefit liabilities. Ms. Neville argues that the PBGC'sassumptions produce a grossly overstated claim that asserts adisproportionate share of the distribution to unsecuredcreditors.

The prudent investor rate is the return on pension funds expectedby a reasonable, prudent, long-term pension-fund portfolioinvestor who seeks the best long-term return on investmentconsistent with preserving capital and minimizing risk.

(2) Unsupported Retirement and Mortality Rate Assumptions

In calculating the unfunded benefit liabilities, the PBGC usesretirement and mortality assumptions that overstate the PBGCClaims. Since the PBGC has not disclosed many of the assumptionsused to estimate the plans' benefit liabilities, the Committeecannot determine the level of influence that retirement andmortality rate assumptions have had in overstating the PBGCClaims. The PBGC should not be permitted to use the retirementand mortality rate assumptions prescribed in the PBGCRegulations, because they are not reflective of historicalexperience. The Court should require the PBGC to use "reasonableretirement and mortality-rate assumptions that reflect historicaldata under the Debtors' pension plans," states Ms. Neville.

(3) Claims Not Reduced for Consideration Received

Ms. Neville argues that the PBGC Claims are overstated becausethe amounts are not reduced by the consideration received underthe PBGC Agreement. The $1,500,000,000 in notes and preferredstock the PBGC will receive under the PBGC Agreement exceeds whatthe PBGC gave up.

Under the PBGC Agreement, the PBGC will relinquish:

(a) a claim for minimum funding contributions to the pension plans;

(b) the right to assert the PBGC Claims against all 27 Debtors -- most of which have no assets;

(c) the alleged, but unsustainable, right to set off certain tax refunds received by the Debtors' postpetition;

(d) the release of perfected liens against the assets of non- debtor controlled group members with minimal value; and

(e) the release of the administrative claim for insurance premiums of $8,000,000.

Ms. Neville asserts that the PBGC relinquished substantially lessthan the $1,500,000,000 it stands to receive under the PBGCAgreement. Accordingly, the PBGC Claims must be reduced by theexcess of value received over the value the PBGC gave up.

"It is now virtually undisputable that the quality of the medicalevidence submitted in support of large numbers of asbestos claimsaround the country is substandard and, in some cases, may befraudulent," David W. Carickhoff, Esq., at Pachulski, Stang,Ziehl, Young, Jones & Weintraub P.C., in Wilmington, Delaware,states.

Mr. Carickhoff asserts that the center of the controversy are therelationships among the lawyers who file the claims and screeningcompanies and doctors who provide "medical" evidence supportingthe claims.

Information about those relationships and the claim manufacturingprocess, however important, remains largely unknown. Mr.Carickhoff relates that although law firms and doctors currentlyare under investigation in courts and by at least one federalgrand jury, no one has yet unraveled the web of relationships,transactions and incentives that have fueled the filing of junkasbestos claims. As recognized by the Court, that informationtypically will not be known by the claimants themselves andcannot be gleaned from the claims, but rather must be learneddirectly from the lawyers and doctors involved in claim filings.

Red Flags of Fraud

Along with the pertinent facts surrounding asbestos claimsdebacle established by the Debtors in their prior briefs, Mr.Carickhoff points out that new evidence continues to mountrevealing the unreliable diagnostic methods employed by doctorsand screening companies in asbestos and silica cases.

"Indeed, the same doctors that supported the baseless silicaclaims are the same doctors who support thousands of Graceclaims. And the same lawyers who filed the bogus silica claimsare the same lawyers who have filed asbestos claims againstGrace," Mr. Carickhoff notes.

On July 20, 2005, The New York Times reported that federalprosecutors in Manhattan are investigating three plaintiffs' lawfirms in connection with various asbestos claims pending in theG-1 Holdings bankruptcy. Mr. Carickhoff says one the three firmsunder investigation is a firm with known asbestos/silica"retreads" against W.R. Grace & Co. Key to those investigationsare interviews with former firm employees in which the employees"described coaching potential claimants and noted efforts toinfluence doctors' diagnoses." In addition, a significant numberof the litigants with claims against Grace are the same litigantswith claims against G-1 Holdings.

Mr. Carickhoff relates that the same prosecutors investigatingG-1 Holdings' claims are also investigating the conduct of theplaintiffs' lawyers during the Texas silica litigation, includingthe fact that "[s]ome of the same law firms that brought [silica]claims also brought asbestos claims, some of the doctors whodiagnosed silica injury in claimants also diagnosed asbestosinjury in claimants -- and many of the same people claiming theywere hurt by silica previously claimed they were harmed byasbestos."

Moreover, on August 2, 2005, the United States Congress, throughthe Energy and Commerce Committee and Oversight andInvestigations Subcommittee, sent letters to the screeningcompanies and doctors involved in the silica litigationrequesting information relating to their specific roles in thesilica litigation. The congressional investigation was sparkedby Congress' concern "that individuals entrusted with the healthcare of patients may have corrupted basic principles or medicalstandards and practice in the service of litigation."

Furthermore, at the heart of the silica claims controversy beforeJudge Janis Graham Jack of the U.S. District Court for theSouthern District of Texas was the existence of thousands ofknown silica/asbestos "retread" claims. Mr. Carickhoff explainsthat a "retread" is a case in which a single claimant has broughtboth claims for asbestosis and silicosis, often based on the samex-ray result. Out of 10,000 silica plaintiffs in the TexasSilica Multidistrict Litigation, some 6,000 had previouslybrought claims for asbestosis. Judge Jack ultimately describedthis practice as the "opportunistic transformations of asbestosisreads into silicosis reads."

Mr. Carickhoff states that the law firms representing thesilicosis claimants are openly acknowledging what the doctorsbefore Judge Jack attested to -- that the retread claimants donot in fact have both silicosis and asbestosis. In the caseswhere there are retreads, it is the asbestosis diagnoses that arecoming under increasing fire.

As Judge Jack pointed out, when claimants "made fraudulent claimsin asbestosis and now those same people who made fraudulentclaims are trying to make another pneumoconiosis claim . . . thatimpacts their credulity tremendously."

To date, Grace has been able to confirm, based on very limitedSocial Security number information available to it, that at least76 current and past claims -- brought by eight different lawfirms -- are retreads from claims brought in the SilicaMultidistrict Litigation. However, based on name comparisons ofonly 3,500 of the 10,000 silica plaintiffs, Grace haspreliminarily confirmed 1,300 to 1,400 retread plaintiffs so far.

Remarkably, Mr. Carickhoff informs Judge Fitzgerald, the Debtors'preliminary investigation has revealed that at least five of thesilica plaintiffs -- Donald Connell, Cora Lee Rogers, JamesHyatt, Zettie Shields, and Effie Coleman -- whose cases weresingled out by name in Judge Jack's opinion as invalid retreadclaims, appear to have current claims against Grace.

"The presence of these confirmed retreads alone suggests, at abare minimum, that the original diagnoses of asbestosis aresuspect," Mr. Carickhoff asserts.

Perhaps even more serious among the problems that Judge Jackrecognized in the Texas Silica MDL is the absence of adequateoccupational and exposure histories to support the diagnoses.Mr. Carickhoff avers that occupational and exposure histories arevital because, as Dr. Gary Friedman testified in the silica case,"infections and a host of different diseases" can look likepneumoconiosis on an x-ray.

The lack of adequate exposure and occupational histories, Mr.Carickhoff says, is critical in determining the validity andvalue of the claims because without these the x-ray readings andcorresponding asbestosis diagnoses are unreliable and the claimsthat are supported by them should receive little, if any, valuein an estimation, particularly when "the suspect practices noware more thoroughly understood."

"The presence of the same inadequate exposure theories, the samedoctors and the same law firms is powerful evidence that the samemalfeasance that occurred in the 'diagnosis' of silica injuriesalso occurred during the 'diagnosis' of asbestos-relateddisease," Mr. Carickhoff argues.

The presence of so many of the same "great red flags of fraud"that were present in the silica litigation makes it clear thatfurther discovery is necessary in Grace's proceeding to determinehow many of the asbestos PI claims are based on suspect practicesthat produce unreliable medical exposure data, Mr. Carickhoffmaintains.

Grace Picks 18 Firms

The Debtors intend to propound a two-page questionnaire to allasbestos PI claimants' counsel to obtain basic information aboutthe relationships among the attorneys, doctors, screeningcompanies and other persons who generated the data that providesthe foundation for the nearly 118,000 current asbestos PI claimsagainst Grace.

In addition to the questionnaire, the Debtors also propose toseek immediate direct discovery of the firms who:

(a) have filed silica "retreads" against Grace as confirmed by a social security number match;

(b) have filed silica "retreads" as confirmed by last name, first name, and middle initial match; and

(c) firms that were criticized by Judge Jack in "In re Silica Products Liability Litigation" for having brought large numbers of "retread" silica/asbestos claims and who now are before the Court with thousands of claims against Grace.

Accordingly, these 18 law firms fit the criteria for Grace'sdirect discovery:

Under the Federal Rules of Bankruptcy Procedure and Federal Rulesof Civil Procedure, Mr. Carickhoff argues that the Debtors have aright to take discovery that is co-extensive with their right totake discovery had the same claims been brought in the typicallitigation posture. The Court has recognized that discovery willprovide "a much better basis for estimation of current claims andpossibly future claims than anything else."

Mr. Carickhoff tells Judge Fitzgerald that the discovery ofattorneys is essential because in the Debtors' case, theattorneys are the entities that are uniquely in possession of therelevant information. "Indeed, common sense dictates that theonly sufficient source capable of providing information as to thefull extent of the attorneys' pre-existing network ofrelationships with doctors, screening companies and even otherlaw firms is the attorneys themselves," Mr. Carickhoff says.

Mr. Carickhoff maintains that the Debtors' proposed discoverywould allow suspect practices and potential fraud to be properlyaccounted for before it is permitted to infect and irreparablyharm the estimation process.

"Whatever minimal burden these requests may generate is faroutweighed by the debtors' and the Court's need for theinformation in [Grace's] estimation proceeding," Mr. Carickhoffinsists.

Chris Parks Objects

Christopher Parks, Esq., at Chris Parks & Associates, in PortArthur, Texas, informs the Court that neither Chris Parks, P.C.,nor Parker & Parks, L.L.P., were criticized by Judge Jack, owingto the fact that these firms have never appeared before JudgeJack, nor have they filed any -- much less "large numbers" -- ofsilica "retread" cases.

Contrary to the Debtors' flippant accusations, Mr. Parks assertsthat none of the Parks Firms fit the Debtors' criteria on directdiscovery.

Mr. Parks explains that the Debtors listed those plaintiffs whosesocial security numbers matched for both silica and asbestosclaims. Only one claimant, Richard Barrientos, is listed asbeing represented by Chris Parks and one other claimant, JosephH. Carrier, is allegedly represented by Parker & Parks.Evidently, the match of one's plaintiff's social security numberis the only reason for the Parks Firms to be included in thegroup of 18 law firms.

Therefore, the Parks Firms ask the Court to deny the Debtors'request because it is based on erroneous facts and that they haveno connection with regards to the issues subject for the proposedimmediate discovery.

Mr. Parks tells Judge Fitzgerald that the Parks Firms had"absolutely no knowledge of any silica-related claims having evenbeen filed" by Mr. Carrier or Mr. Barrientos. The Parks Firmsneither filed a silica lawsuit, nor has any connection, financialor otherwise, to any silica lawsuit for Mr. Carrier or Mr.Barrientos.

Subsequently after the Debtors' request for immediate discoverywas filed, the Parks Firms discovered that Mr. Barrientos isrepresented by Heard, Robins in a silica case.

"It is unreasonable to permit [the] Debtors to launch animmediate assault of depositions and subpoenas on [the Parksfirms] based on the fact that only one client of each firm has asocial security match to a silicosis lawsuit and these firms haveabsolutely no connection with any possible silicosis claim filedby either client," Mr. Parks notes.

Debtors Disclose Anticipated Witnesses for Phase II

In accordance with the Court's case management order for theestimation of asbestos property damage liabilities, the Debtorspresent their preliminary witness disclosures for Phase IIproperty damage estimation.

Mr. O'Neill tells Judge Fitzgerald that the disclosure is dividedinto three parts:

(1) listing of fact witnesses that the debtors anticipate calling to testify at the Phase II trial live or by deposition, along with the subjects on which those witnesses are expected to testify;

(2) listing of expert witnesses that the Debtors have retained to provide trial testimony in Phase II, the nature of their expertise, and the currently anticipated subjects of their testimony; and

(3) identifying other types of expert witnesses that the Debtors have not yet retained to testify in Phase II, but anticipate they may retain in the future, to provide trial testimony.

In addition to the witnesses, the Debtors reserve the right tocall to testify at the Phase II trial:

-- any fact or expert witness listed on any other party's Phase II witness disclosure;

-- any claimant how submitted a property damage claim, as well as any person that signed any property damage claim form, to testify regarding the facts surrounding the claims that they submitted or signed; and

-- any fact or expert witnesses the Debtors will identify on October 17, 2005, in accordance with the PD Estimation CMO to testify in Estimation Phase I, to address any Phase I issues that may still remain as of the Phase II trial.

The Debtors believe that Phase I issues -- which centers onconstructive notice and dust sampling methodology -- can andshould be resolved during Phase I and will not remain as "openissues" by the Phase II hearing. However, the Debtors recognizethat the Official Committee of Asbestos Property Damage Claimantsis still trying to avoid the Phase I issues.

To the extent the PD Committee, over their opposition, issuccessful in deferring any Phase I issues to Phase II, theDebtors would call their Phase I witnesses to testify atPhase II.

The Debtors continue to analyze the thousands of PD claimssubmitted in their Chapter 11 cases and reserve the right tosupplement their disclosure with additional facts and expertwitnesses that may be needed to address Estimation Phase IIissues raised by those claims.

As former WR Grace employees, they will describe relevant Grace products generally, including:

* the application and uses of the products; * the history of the products; * the reformulation of the products; and * issues related to product identification.

(2) Daniel A. Speights and Amanda G. Steinmeyer

Representing Speights & Runyan, Attorneys at Law, they will be called to testify regarding property damage claims submitted in the Debtors' Chapter 11 cases by the Speights & Runyan firm, including testimony regarding any statement made in those claims and their supporting materials.

The Retained Expert Witnesses are:

(1) Morton Corn, Ph.D.

An environmental health engineer and industrial hygienist, Dr. Corn may testify about the current and historical standards, policies, and regulations applicable to asbestos and asbestos-containing products. He may explain the various methods and technologies for measuring asbestos in the air and may render an opinion as to asbestos levels in buildings. Dr. Corn may also testify about assessing the risk to building occupants, maintenance workers, custodians, and others of exposure to asbestos-containing materials in buildings.

In addition, Dr. Corn may also comment on the issue of quantitative risk assessment and explain how government regulators have calculated theoretical risks for exposure to low levels of asbestos concentrations. He may opine that calculated theoretical risks can best be understood when compared to other risks commonly experienced. He may give an opinion about any alleged release of asbestos fibers from asbestos-containing materials and the potential for reentrainment of particles from surfaces. Dr. Corn may also give an opinion about the maintenance of asbestos-containing materials under operations and maintenance plans, and the necessity or lack of necessity for removal or enclosure of asbestos-containing materials in buildings.

Moreover, Dr. Corn may also be expected to give testimony consistent with or analogous to the substance of the testimony given in previous property damage cases prosecuted by Martin Dies, Edward Westbrook and Daniel Speights on behalf of PD claimants.

(2) William G. Hughson, M.D., D. Phil.

Dr. Hughson is a medical doctor and epidemiologist with extensive expertise in the evaluation and treatment of patients who have been exposed to asbestos. Dr. Hughson's testimony will address the relationship between asbestos exposure and disease. Dr. Hughson will describe, based on his clinical experience as well as the scientific literature, the nature and magnitude of the risk of disease from exposure to asbestos in buildings. He will explain how dose, fiber type, and fiber size affect the risk of disease and will address the linear no-threshold hypothesis. He will discuss epidemiological and other studies of the risk of disease from asbestos exposure.

(3) Richard Lee, Ph.D.

Dr. Lee is a microscopist, material analyst, and theoretical physicist with expertise in the constituent analysis of asbestos samples and the measurement and analysis of asbestos levels. Dr. Lee's testimony will cover the techniques regarding the collection, analysis and measurement of asbestos levels in buildings, and the development of scientific knowledge on the same. He may discuss the standards and regulations governing asbestos in air, and the levels of asbestos in buildings and the ambient air. He may testify regarding product identification through the use of bulk sampling, including the analytical techniques involved and the interpretation of data obtained. He may also testify regarding soil sampling for asbestos, including sampling methods and analytical techniques.

(4) Roger G. Morse, A.I.A.

An architect with expertise in asbestos evaluation and control, Mr. Morse may give an opinion about the maintenance of asbestos-containing materials under operations and maintenance plans, and the necessity or lack of necessity for removal or enclosure of asbestos- containing materials in buildings. Mr. Morse may opine on the state-of-the-art of architects' knowledge concerning the use of asbestos in building products. He may describe the development, use, and characteristics of asbestos-containing materials in building construction, including the cost-saving aspects and comparisons to alternative construction methods. He will also testify about the valuation of property damage claims.

(5) Thomas B. Florence, Ph.D.

As president of APRC, a research and consulting firm, Dr. Florence has expertise in assessing liabilities, including asbestos liabilities. He will address the valuation and estimation of Grace's liabilities arising from the asbestos PD claims made against Grace.

The Debtors may call on experts on Canadian law to address the likelihood of success on the merits of pending Canadian claims when adjudicated in Canada.

(2) Experts on California University Claims

The Debtors may need experts to testify about the nature, extent, and timing of California State University's and the University of California's knowledge of asbestos-related issues, to the extent those California claims remain at the time of the Phase II trial.

(3) Experts on Category II Claims

The Debtors may call on experts to address the merits and valuation of Category B PD claims, including:

-- whether the properties identified are hazardous or require remediation; and

-- the costs of remediation efforts or the impact on property values for the Category B properties identified.

(4) Experts on Valuation of Claims

The Debtors may call on additional experts to testify regarding the valuation of Category I PD claims, including the costs of abatement, and the costs of an operations or maintenance program.

(5) Experts on Risk Assessment

The Debtors may call on additional experts to address whether Category I or Category II claims pose a risk that they require remediation.

(6) Experts on Construction and Renovation Work

The Debtors may need additional experts to testify on issues relating to construction and renovation work in the buildings at issue and to testify concerning the relationship of these activities to asbestos-containing materials in buildings.

W.R. GRACE: Can Participate in Marsh & New York Settlement----------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware gaveW.R. Grace & Co., and its debtor-affiliates permission toparticipate in a settlement between:

2. the Attorney General of the State of New York and the Superintendent of Insurance of the State of New York.

Marsh & McClennan Companies is a global professional servicesfirm with annual revenues exceeding $11 billion. It is theparent company of:

-- Marsh Inc., a risk and insurance services firm;

-- Putnam Investments, one of the largest investment management companies in the United States; and

-- Mercer Inc., a global provider of consulting services.

In October 2004, New York Attorney General Eliot Spitzercommenced actions against Marsh before the Supreme Court of theState of New York, charging the insurance brokerage firm offraudulent and anti-competitive practices in connection with thebrokering of insurance business in violation of the New YorkExecutive Law, the General Business Law and common law.

The New York Superintendent of Insurance also issued a citation,charging Marsh with having used fraudulent, coercive anddishonest practices, having demonstrated untrustworthiness,violating Section 340 of the General Business Law, and havingengaged in determined violations of the Insurance Law.

The Attorney General and the Superintendent accused Marsh ofdeceiving clients by:

-- steering the clients' insurance business to favored insurance companies; and

They argued that Marsh received contingent commissions fromfavored insurers, which Marsh failed to adequately disclose. Thecomplaint alleged that Marsh collected approximately $800,000,000in contingent commissions in 2003.

On January 30, 2005, Marsh agreed to settle the complaint byestablishing an $850,000,000 settlement fund to compensate U.S.policyholder clients who retained Marsh to place, renew, consulton or service insurance between January 1, 2001, and December 31,2004, where the placement, renewal, consultation or servicingresulted in contingent commissions or overrides Marsh recordedduring the period. The fund is payable in four annualinstallments over the next four years.

Marsh entered into the settlement agreement without admitting ordenying anything.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, LLP, inChicago, Illinois, tells Judge Fitzgerald that from 2001 to 2004,the Debtors purchased insurance policies from various insurancecarriers for which Marsh acted as the Debtors' broker. From 2001to 2003, the Debtors also purchased surety bonds from varioussurety companies through Marsh.

Mr. Sprayregen says W.R. Grace & Co. and W.R. Grace & Co.-Conn.have received offer letters dated May 20, 2005, from Marshsetting forth the amounts the Debtors are eligible to receivefrom the Fund and the related terms and conditions of thesettlement offer.

The first Offer Letter relates to insurance policies as to whichMarsh had acted as the Debtors' broker. The first Offer Letterindicates that the Debtors paid on the policies $48,605,602 inpremiums or consulting fees, and Marsh recorded $2,680,608 inattributed contingent commissions or overrides.

The second Offer Letter relates to surety bonds the Debtorsprocured through Marsh. The second Offer Letter indicates thatthe Debtors paid on the bonds $109,027 in premiums, and Marshrecorded $7,644 in attributed contingent commissions oroverrides.

The premium amounts stated in the Offer Letters are substantiallyconsistent with the Debtors' own records.

The Debtors are eligible to receive $1,385,307 to be paid in fourannual installments beginning November 1, 2005, Mr. Sprayregensays. The next payments are due June 30, 2006, June 30, 2007,and June 30, 2008.

The deadline for electing to participate in the Settlement Fundis September 20, 2005.

Mr. Sprayregen relates that the Debtors have decided to acceptthe settlement offers. By electing to receive cash, the Debtorswill tender a release and waiver of all claims and causes ofactions against Marsh relating to the Complaint or the Citation,except for claims relating to the purchase or sale of Marshsecurities.

Mr. Sprayregen notes that any eligible client that elects not toparticipate in the Settlement Fund will retain any rights topursue an individual or class against the brokerage firm,including participating in a putative class action entitled Inre: Insurance Brokerage Antitrust Litigation, Civil No. 04-5148(FSH), MDL No. 1663, against Marsh and other companies pending inthe U.S. District Court for the District of New Jersey.

The Class Action asserts numerous violations of federal and statestatutory and common law, and seeks various forms of damages andother relief on behalf of policyholders.

Mr. Sprayregen, however, points out that Marsh is permitted underthe Settlement to use the non-participating client's allocatedshare of the Fund to satisfy any pending or other claims bypolicyholders. No distribution will be made to non-participatingpolicyholders until all participating policyholders have beenpaid their full aggregate amount due as calculated under theSettlement Agreement.

In addition, any payment to non-participating policyholders willnot exceed 80% of the policyholder's original allocated share.Any amounts that remain in the Fund as of June 20, 2008, will bedistributed on a pro rata basis to participating policyholders.In no event will any of the funds be used to pay attorney's fees.

WELLINGTON PROPERTIES: Files Plan of Reorganization in N.C.-----------------------------------------------------------Wellington Properties, LLC, has unveiled its Chapter 11 Plan ofReorganization and delivered a copy of it (together with aDisclosure Statement explaining the economic assumptionsunderpinning the Plan) to the U.S. Bankruptcy Court for the MiddleDistrict of North Carolina, Durham Division.

The Plan provides that the Debtor will:

1) obtain funds through a combination of existing funds on hand, a new capital contribution, and business operations;

3) restructure allowed secured claims so as to permit full payment over a reasonable period of time;

4) pay allowed unsecured claims without interest 60 days after the Effective Date; and

5) issue new equity interests to an investor in return for the new capital contribution.

LaSalle Bank National Association, as trustee for the RegisteredHolders of LB Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 1998-C1, for whom GMAC CommercialMortgage Corporation has been designated as Servicer and asSpecial Servicer, will be paid adequate protection payments asauthorized by the Court. The outstanding balance of the securedclaim will become the restated principal balance of the promissorynote. The salient terms governing the issuance of the newpromissory note are:

a) interest will accrue at the rate of 7.36% per annum;

b) payments during years one through four would be made monthly in arrears and in amounts calculated as if the note were interest only and at rates of 6%, 7%, 8% and 9%, respectively, with accrued but unpaid interest bearing interest until paid and with all interest which accrued after the Effective Date to be paid in full by the end of year four;

c) payments during years five and after would be made monthly in arrears and in amounts calculated as if the note were being amortized on the remainder of a 30-year term commencing at the Effective Date; and

d) the promissory note will be secured by existing liens on all or substantially all of the Debtor's real and personal property.

After its emergence, the Debtor will retain substantially all ofits assets, subject to existing liens to secure repayment ofindebtedness to some creditors.

Terrell M. Rhye will make capital a capital contribution to fundthe Debtor's emergence from bankruptcy. Mr. Rhye's contributionwill give him at least 51% equity stake in the ReorganizedWellington.

Headquartered in Durham, North Carolina, Wellington Properties,LLC, owns and operates a 501-unit apartment complex known asWellington Place located in Durham, North Carolina. The Companyfiled for chapter 11 protection on March 29, 2005 (Bankr.M.D.N.C. Case No. 05-80920). John A. Northen, Esq., at NorthenBlue, L.L.P., represents the Debtor in its restructuring efforts.When the Debtor filed for protection from its creditors, it listedtotal assets of $11,625,087 and total debts of $12,632,012.

Joseph L. Schwartz, Esq., at Riker, Danzig, Scherer, Hyland &Perretti, LLP, in New York, tells the U.S. Bankruptcy Court forthe Southern District of New York that because of the necessity tohave sufficient components to build the anticipated RestwarmerProduct units, because of the lag time in the delivery of certainof the components, Viasystems would require the needed inventoryof parts and components in advance of actually receiving apurchase order from WestPoint.

Fahrenheit Blanket

Beginning in 2001, WestPoint developed a new product called theFahrenheit Blanket. WestPoint asked Viasystems to provide thewiring and controls for the Fahrenheit Product and assist in itsmanufacture and assembly. WestPoint started selling that productin 2002.

In late 2003, WestPoint ordered Viasystems to stop the productionof the Fahrenheit Product. Mr. Schwartz reports that as ofJanuary 2004, following the completion of all of the units of theFahrenheit Product that WestPoint accepted, Viasystems had anexcess inventory of materials and components totaling $195,843,with incidental labor costs of $16,582.

Cancelled Purchase Orders

On May 26, 2004, WestPoint placed an order with Viasystems for$690,050 of materials for the Restwarmer Product, to whichViasystems complied. However, Mr. Schwartz points out thatWestPoint refused to pay Viasystems for the inventory materialsrelated to the Fahrenheit Product and for all the materialsViasystems supplied for the Restwarmer Purchaser Order.

WestPoint issued and then cancelled certain purchase orders on theFahrenheit Product after the components had been produced. Thiscancellation, Mr. Schwartz argues, was in breach of WestPoint'sobligations to Viasystems. Furthermore, WestPoint remainsobligated to purchase the balance of the Fahrenheit Inventory.

Mr. Schwartz asserts that despite Viasystems' demand for paymenton January 16, 2005, WestPoint has failed to pay of the FahrenheitInventory. Viasystems has attempted to cover its damages byselling the Fahrenheit Inventory. However, there is no market forit.

Viasystems Asserts Damages

Viasystems asserts that WestPoint breached the contracts on theFahrenheit Product and the Restwarmer Product, by failing andrefusing to pay Viasystems for the goods that it ordered.

Thus, Viasystems asks the Court to compel WestPoint to pay it$212,424 for damages related to the Fahrenheit Inventory, and$195,603 for damages related to the Restwarmer Product.

Viasystems also charges WestPoint with fraud and asks the Court toaward it $195,603, plus punitive damages in an amount to bedetermined at trial. Viasystems asserts that WestPoint knowinglyand intentionally made false representations designed to obtainViasystems' goods with no intention of paying for all of them.

"WestPoint's representations were outrageous, made evil withmotive, were wanton and willful or with reckless disregard for therights of Viasystems," Mr. Schwartz says.

WHEREHOUSE ENTERTAINMENT: Wants Until Oct. 30 to Object to Claims-----------------------------------------------------------------Wherehouse Entertainment, Inc., and its debtor affiliates ask theU.S. Bankruptcy Court for the District of Delaware to extend,until Oct. 30, 2005, the period within which they can object toclaims filed against the Debtors' estate.

Since the chapter 11 filing, the Debtors have worked diligently toreview all claims filed in these cases. They already have filednine omnibus claims objections seeking to reduce and allow orexpunge administrative, secured and priority claims.

To date, the Debtors have been able to reach a consensualresolution regarding the amount and priority of numerous claims towhich the Debtors had objected. In addition, they successfullyreached consensual resolutions with a variety of claimants withoutthe need to file an objection to some claims.

Accordingly, the Debtors believe that the extension period isnecessary to allow them to thoroughly complete their review of theclaims to ensure efficient and accurate completion of the claimsreconciliation process.

Moody's noted that Winston Hotels' fixed charge coverage is goodfor its peer group at 2.4x YTD (including capitalized interest,principal amortization and adjusted for reserves) and has stayedin the 2.2x to 2.7x range for the past two years. Winston Hotelsposted positive RevPAR growth of 7.1% for 2Q05 versus the prioryear. Although occupancy rates decreased slightly from 70.4% to69.4% because the REIT sold four hotels, year-over-year occupancyrates improved from 65% to 67% at YE2004. ADR also increased 8.7%from $80.67 to $87.70 during 2Q05 as compared to 2Q04. Inaddition, operating margins have improved from 12.8% for 2003 to14.4% for 2004 and held steady at 18% for YTD 2005.

Moody's rating action indicates that Winston Hotels has shownresilience in a post-September 11 lodging environment, whichcreated substantial challenges for all hotel sub-sectors,including the mid-scale and high-end limited-service hotelsegments on which Winston Hotels focuses. Although Winston Hotelsowns some high-end limited-service, extended-stay and full-servicehotels, the vast majority of the REIT's properties are in the mid-scale non-food-and-beverage category, and 72% are located in theMid-Atlantic/Southeast, with a concentration in North Carolina andGeorgia.

Moody's stated that Winston Hotels had eleven mezzanine loans tothird-party hotel owners totaling $31 million at 2Q05. The REITis in the process of expanding this lending program through ajoint venture with GE Capital, in which GE will provide the firstmortgages and Winston will provide the mezzanine piece. Assetquality performance has been good so far, but it is still earlydays.

In order to receive a rating upgrade, Winston Hotels would need toshow further growth in RevPAR, increased size (to assets near $500million) and diversification at a measured pace, and a stablelevel of secured debt and leverage. The rating would be pressuredif:

* asset or RevPAR growth were to stall;

* fixed charge coverage were to decline to the low 2x range; or

* there were asset quality problems in its mezzanine loan portfolio.

At the same time, Moody's has withdrawn ratings on the shelffilings of Winston Hotels, Inc. for business reasons.

Winston Hotels, Inc. [NYSE:WXH] is a lodging REIT headquartered inRaleigh, North Carolina, USA. At June 30, 2005, Winston Hotelshad total assets of $424 million, and equity of $238 million.

WODO LLC: Can Ask for Acceptances from Creditors Until Jan. 13--------------------------------------------------------------The U.S. Bankruptcy Court for the Western District of Washingtonextended Wodo, LLC's period to solicit acceptances for its Plan ofReorganization until Jan. 13, 2006.

The Debtor says it needs the extension so that it can makenecessary amendments on the submitted Plan that will incorporatethe negotiated resolution of WULA's claim. WULA is major securedcreditor holding approximately $20 million in claims against theDebtor.

The compromise agreement requires the Debtor to make an initialpayment to WULA by Oct. 17, 2005. The Debtor has filed a motionfor approval of the compromise. The Debtor anticipates WULA'saffirmative vote on a Plan as a result of the compromiseagreement.

Headquartered in Bellingham, Washington, Wodo, LLC, fka TrilliumCommons, LLC, is a real estate company. The Company filed forchapter 11 protection on January 18, 2005 (Bankr. W.D. Wash. CaseNo. 05-10556). Gayle E. Bush, Esq., at Bush Strout & Kornfeldrepresents the Debtor in its restructuring efforts. When theDebtor filed for protection from its creditors, it listed totalassets of $90,380,942 and total debts of $21,451,210.

WORLDCOM INC: Philadelphia Wants Court to Allow Tax Claims----------------------------------------------------------Carolyn Hochstadter Dicker, Esq., at Klehr, Harrison, Harvey,Branzburg & Ellers, LLP, in Philadelphia, Pennsylvania, tells theU.S. Bankruptcy Court for the Southern District of New York thatpursuant to records, WorldCom, Inc., and its debtor-affiliatescurrently owe the City of Philadelphia these business privilegetaxes inclusive of interest and penalties through Sept. 7, 2005:

Interest and penalties continue to accrue through the date ofpayment, Ms. Dicker says.

Accordingly, Philadelphia asks the Court to compel the Debtors topay the Taxes as an allowed expense claim against their estates.

Pursuant to Section 202 of the City of Philadelphia BusinessPrivilege Tax Regulations, the Debtors were required to file taxreturns with respect to business privilege taxes on an annualbasis by the 15th day of April following the year in which the taxwas due and submit payment thereof with the filing of the returns.

Furthermore, Section 503 of the Bankruptcy Code provides for thepayment of taxes due after the commencement of the bankruptcy caseas administrative expense priority tax claims together withpenalties and interest accrued through the date of payment."Because the Taxes are, respectively, due for a year-endingpostpetition, these taxes constitute claims payable under section503(b) of the Bankruptcy Code," Ms. Dicker asserts.

Philadelphia believes that the Debtors have sufficient resourcesto satisfy the administrative expense claim for Taxes.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now knownas MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries andmaintaining one of the most expansive IP networks in the world.The Company filed for chapter 11 protection on July 21, 2002(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, theDebtors listed $103,803,000,000 in assets and $45,897,000,000 indebts. The Bankruptcy Court confirmed WorldCom's Plan onOctober 31, 2003, and on April 20, 2004, the company formallyemerged from U.S. Chapter 11 protection as MCI, Inc. (WorldComBankruptcy News, Issue No. 103; Bankruptcy Creditors' Service,Inc., 215/945-7000)

WORLDCOM: Deutsche Bank Wants Move for Summary Judgment Denied--------------------------------------------------------------WorldCom, Inc. and its debtor-affiliates asked the U.S. BankruptcyCourt for the Southern District of New York to grant them summaryjudgment and disallow Deutsche Bank AG, London Branch's claims:

(1) The Dividend Claim -- Claim No. 25985 for $7,906,920, asserted on account of unpaid dividends on MCI Group common stock; and

(2) The Conversion Claim -- Claim No. 25986 for $256,160, alleging damages attributable to the Debtors' decision not to effect the conversion of MCI Group common stock to WorldCom Group common stock.

Deutsche Bank Responds

A determination as a matter of law as to the Debtors' solvency asof particular dates in March and July 2002, cannot be made basedon the limited evidence of the bankruptcy filing, the distributionto unsecured creditors and the restated balance sheets, Edward J.Estrada, Esq., at LeBoeuf, Lamb, Greene &MacRae, LLP, in New York argues.

"It is not sufficient simply to measure current assets againstcurrent liabilities, or determine that the present estimated'liquidation' value of the corporation's assets would produceinsufficient funds to satisfy the corporation's existingliabilities," Mr. Estrada maintains.

"The Debtors have failed to establish insolvency as a matter oflaw," Mr. Estrada contends.

Mr. Estrada further argues that even though a debtor may bepresumed to be insolvent due to the presence of various indicia ofinsolvency, the true state of its financial affairs can only bedetermined after a thorough factual showing at trial.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now knownas MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries andmaintaining one of the most expansive IP networks in the world.The Company filed for chapter 11 protection on July 21, 2002(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, theDebtors listed $103,803,000,000 in assets and $45,897,000,000 indebts. The Bankruptcy Court confirmed WorldCom's Plan onOctober 31, 2003, and on April 20, 2004, the company formallyemerged from U.S. Chapter 11 protection as MCI, Inc. (WorldComBankruptcy News, Issue No. 103; Bankruptcy Creditors' Service,Inc., 215/945-7000)

* Thoits Love Expands Practice with Two New Palo Alto Associates----------------------------------------------------------------Thoits, Love, Hershberger & McLean, one of Silicon Valley's mostestablished general practice law firms, named Allison K. Arnelland Alexandra S. Narancic as the firm's associates for the Trustsand Estates practice based in Palo Alto.

"We are very excited to have Alexandra and Allison join ourexpanding Trusts & Estates practice group," said Michael Curtis,shareholder, Thoits. "The addition of Alexandra and Allison willallow us to continue providing our clients in the Bay Area, andnow Santa Cruz County, with the high quality legal services forwhich Thoits is known."

Allison K. Arnell joins the firm from San Francisco-based Morrison& Foerster LLP where she represented banks and borrowers insecured and unsecured lending transactions. She received her B.A.with honors from the University of California at Davis, and is amember of the Phi Beta Kappa Society. She received her lawdegree, cum laude, from the University of California, HastingsCollege of the Law and is a member of the Thurston Society andOrder of the Coif. During law school, Ms. Arnell served as ajudicial extern to U.S. District Court Judge Charles Breyer andU.S. Bankruptcy Court Judge Dennis Montali. Having studied abroadat the Pontificia Universidad Católica de Chile while in college,Ms. Allison is fluent in Spanish.

Alexandra S. Narancic worked for Andersen and, most recently, forErnst & Young's Personal Financial Consulting Group. She receivedher B.A. from the University of Chicago and her law degree fromHastings College of the Law where she was a member of the HastingsCommunications and Entertainment Law Journal. She also holds anLL.M. in Taxation with Honors from Golden Gate School of Law.While getting her LL.M. she externed for the Alameda CountySuperior Court in the Probate Department. Ms. Narancic'sprofessional activities include membership in the State Bar ofCalifornia Tax Section and Young Tax Lawyers Association. Herinterest in residential real estate led her to become a licensedreal estate broker. Having grown up in Germany, she is fluent inGerman as well as Serbian.

Headquartered in Palo Alto, California, 94301, Thoits, Love,Hershberger & McLean -- http://www.thoits.com/-- has been a prominent member of the Palo Alto legal community for over 55years. The firm is dedicated to providing high quality legalservices to clients of all sizes.

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Monday's edition of the TCR delivers a list of indicative pricesfor bond issues that reportedly trade well below par. Prices areobtained by TCR editors from a variety of outside sources duringthe prior week we think are reliable. Those sources may not,however, be complete or accurate. The Monday Bond Pricing tableis compiled on the Friday prior to publication. Prices reportedare not intended to reflect actual trades. Prices for actualtrades are probably different. Our objective is to shareinformation, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy orsell any security of any kind. It is likely that some entityaffiliated with a TCR editor holds some position in the issuers'public debt and equity securities about which we report.

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